Diastole Wealth Management, Inc.

Allegations: ON SEPTEMBER 10, 2021, THE SEC ISSUED A SETTLED ORDER (THE "ORDER), TO WHICH DWM AND ELIZABETH EDEN (THE "RESPONDENTS') CONSENTED WITHOUT ADMITTING OR DENYING THE FINDINGS IN THE ORDER. ACCORDING TO THE ORDER, DWM DID NOT ADEQUATELY DISCLOSE CERTAIN CONFLICTS OF INTEREST RELATING TO INVESTMENTS MADE BY EDEN PARTNERS ABSOLUTE GROWTH FUND ("EPAG") IN NOTES ISSUED BY MARKET76, INC. ("M76"), A PRIVATE COMPANY OWNED BY ELIZABETH EDEN'S SON. ACCORDING TO THE ORDER, A PORTION OF THE PROCEEDS FROM THE EPAG INVESTMENT IN M76 WERE TRANSFERRED TO DWM AS REPAYMENT OF LOANS THAT DWM PREVIOUSLY HAD MADE TO M76. EPAG HAS BEEN REIMBURSED FOR THAT PORTION OF EPAG'S INVESTMENT IN M76 THAT WAS TRANSFERRED TO DWM. THE ORDER ALSO FOUND THAT DWM DID NOT TIMELY DELIVER AUDITED FINANCIAL STATEMENTS FOR EPAG TO THE FUND INVESTORS. Status: Final Sanction Detail: THE ORDER FINDS THAT THE RESPONDENTS VIOLATED CERTAIN PROVISIONS OF THE INVESTMENT ADVISERS ACT OF 1940 (THE "ADVISERS ACT") AND ORDERS THAT (1) RESPONDENTS ARE CENSURED, (2) RESPONDENTS CEASE AND DESIST FROM FUTURE VIOLATIONS OF THE ADVISERS ACT, (3) DWM PAY A CIVIL PENALTY OF $100,000 AND MS. EDEN PAY A CIVIL PENALTY OF $60,000, AND (4) MS. EDEN IS LIMITED IN HER ACTIVITIES FROM SERVING AS A CHIEF COMPLIANCE OFFICER. DWM ALSO AGREED TO ENGAGE AN INDEPENDENT COMPLIANCE CONSULTANT TO REVIEW CERTAIN ASPECTS OF DWM'S COMPLIANCE PROGRAM AND MAKE RECOMMENDATIONS. PAYMENT SHALL BE MADE IN THE FOLLOWING INSTALLMENTS: (I) WITHIN 10 DAYS OF THE ENTRY OF THIS ORDER, DIASTOLE SHALL PAY $33,000 AND EDEN SHALL PAY $20,000; (II) WITHIN 6 MONTHS OF THE ENTRY OF THIS ORDER, DIASTOLE SHALL PAY ANOTHER $33,000 AND EDEN SHALL PAY ANOTHER $20,000; AND (III) WITHIN 12 MONTHS OF ENTRY OF THIS ORDER, DIASTOLE SHALL PAY THE BALANCE OF $34,000 AND EDEN SHALL PAY THE BALANCE OF $20,000. Summary: ON SEPTEMBER 10, 2021, THE SEC ISSUED A SETTLED ORDER (THE "ORDER"), TO WHICH DWM AND ELIZABETH EDEN (THE "RESPONDENTS") CONSENTED WITHOUT ADMITTING OR DENYING THE FINDINGS IN THE ORDER. ACCORDING TO THE ORDER, DWM DID NOT ADEQUATELY DISCLOSE CERTAIN CONFLICTS OF INTEREST RELATING TO INVESTMENTS MADE BY EDEN PARTNERS ABSOLUTE GROWTH FUND ("EPAG") IN NOTES ISSUED BY MARKET76, INC. ("M76"), A PRIVATE COMPANY OWNED BY ELIZABETH EDEN'S SON. ACCORDING TO THE ORDER, A PORTION OF THE PROCEEDS FROM THE EPAG INVESTMENT IN M76 WERE TRANSFERRED TO DWM AS REPAYMENT OF LOANS THAT DWM PREVIOUSLY HAD MADE TO M76. EPAG HAS BEEN REIMBURSED FOR THAT PORTION OF EPAG'S INVESTMENT IN M76 THAT WAS TRANSFERRED TO DWM. THE ORDER ALSO FOUND THAT DWM DID NOT TIMELY DELIVER AUDITED FINANCIAL STATEMENTS FOR EPAG TO THE FUND'S INVESTORS. THE ORDER FINDS THAT THE RESPONDENTS VIOLATED CERTAIN PROVISIONS OF THE INVESTMENT ADVISERS ACT OF 1940 (THE "ADVISERS ACT") AND ORDERS THAT (1) RESPONDENTS ARE CENSURED, (2) RESPONDENTS CEASE AND DESIST FROM FUTURE VIOLATIONS OF THE ADVISERS ACT, (3) DWM PAY A CIVIL PENALTY OF $100,000 AND MS. EDEN PAY A CIVIL PENALTY OF $60,000, AND (4) MS. EDEN IS LIMITED IN HER ACTIVITIES FROM SERVING AS A CHIEF COMPLIANCE OFFICER. PURSUANT TO THE ORDER, DWM HAS ALSO AGREED TO ENGAGE AN INDEPENDENT COMPLIANCE CONSULTANT TO REVIEW CERTAIN ASPECTS OF DWM'S COMPLIANCE PROGRAM AND MAKE RECOMMENDATIONS.