Circle Squared Alternative Investments, Llc

Allegations: ON FEBRUARY 27, 2020, THE SEC FILED A SETTLED ORDER INSTITUTING ADMINISTRATIVE PROCEEDINGS ("OIP") AGAINST REGISTERED INVESTMENT ADVISER SICA WEALTH MANAGEMENT, LLC ("SWM") AND ITS PRINCIPAL JEFFREY C. SICA ("SICA"). SWM AND MR. SICA AGREED TO SETTLE THE OIP WITHOUT ADMITTING OR DENYING THE SEC'S FINDINGS CONTAINED THEREIN. ACCORDING TO THE SEC, SWM AND MR. SICA FAILED TO ADEQUATELY DISCLOSE CERTAIN COMPENSATION THAT SWM AND AN AFFILIATED ADVISER RECEIVED FROM AEQUITAS MANAGEMENT, LLC DURING THE TIME THAT SWM AND MR. SICA RECOMMENDED THAT CERTAIN CLIENTS INVEST IN SECURITIES ISSUED BY AEQUITAS COMMERCIAL FINANCE, LLC ("ACF") (AEQUITAS MANAGEMENT, LCC, THE PARENT COMPANY OF ACF, AND ACF ARE REFERRED TO HEREIN AS "AEQUITAS"). THE SEC FOUND THAT AEQUITAS PAID SWM AND THE AFFILIATED ADVISER A TOTAL OF $2 MILLION PURSUANT TO CONSULTING AGREEMENTS AND A LOAN AGREEMENT, WHICH CREATED CONFLICTS OF INTEREST RELATING TO SWM'S AND SICA'S RECOMMENDATIONS THAT CLIENTS INVEST IN AEQUITAS SECURITIES. APPROXIMATELY 45 SWM CLIENTS INVESTED APPROXIMATELY $30.6 MILLION IN ACF NOTES BETWEEN OCTOBER 2013 AND MARCH 2015. THE SEC FURTHER FOUND THAT THE AEQUITAS AGREEMENTS AND THE RESULTING COMPENSATION SHOULD HAVE BEEN DISCLOSED TO CLIENTS SO THAT THEY COULD FAIRLY EVALUATE THE CONFLICTS IN DECIDING WHETHER TO INVEST IN AEQUITAS SECURITIES. SWM AND MR. SICA CEASED RECOMMENDING AEQUITAS IN MARCH 2015 AND HAD REDEEMED APPROXIMATELY $20 MILLION OF THE ACF NOTES BY NOVEMBER 2015. BASED ON THE FAILURE TO ADEQUATELY DISCLOSE THE CONSULTING AND LOAN PAYMENTS, THE SEC FOUND THAT SWM AND MR. SICA VIOLATED SECTION 206(2) OF THE INVESTMENT ADVISERS ACT OF 1940.PURSUANT TO THE OIP, SWM AND MR. SICA WERE CENSURED AND ORDERED TO CEASE-AND DESIST FROM VIOLATING SECTION 206(2) OF THE ADVISER ACT. IN ADDITION, SWM WILL PAY DISGORGEMENT OF $236,029.19, PREJUDGMENT INTEREST OF $57,173.06 AND A CIVIL PENALTY OF $80,000. THE DISGORGEMENT AND PREJUDGMENT INTEREST ULTIMATELY WILL BE DISTRIBUTED TO SWM CLIENTS WHO PAID MANAGEMENT FEES ON THEIR ACF NOTES TO SWM OR ITS AFFILIATED ADVISER. MR. SICA WILL PAY A CIVIL PENALTY OF $30,000. Status: Final Sanction Detail: JEFFREY SICA TO PAY $30,000 CIVIL PENALTY TO THE SEC. Summary: JEFFREY SICA TO PAY $30,000 CIVIL PENALTY TO THE SEC.