SEC Takes Action Against Momentum Advisors & Former Officers for Misuse of Fund Assets

Key Takeaways

• Misuse of Funds: Former Momentum Advisors COO Tiffany L. Hawkins misappropriated around $223,000 from portfolio companies, using company debit cards for personal expenses like vacations and shopping.
• Lack of Oversight: Former managing partner Allan J. Boomer failed to supervise Hawkins, even after red flags of misuse appeared. He also authorized the fund to pay a debt that should have been handled by another entity, providing an unearned benefit of $346,904.
• SEC Violations: Hawkins and Boomer violated the antifraud provisions of the Investment Advisers Act of 1940. Momentum Advisors was found in violation for failing to implement adequate policies and procedures, and for not conducting required audits.
• Penalties and Sanctions: Hawkins faces a $200,000 civil penalty and a bar from associating with investment advisers. Boomer will pay an $80,000 penalty and serve a 12-month suspension from supervisory roles. Momentum Advisors will pay a $235,000 penalty and receive a censure.

Deep Dive

The Securities and Exchange Commission (SEC) unveiled charges against investment advisory firm Momentum Advisors LLC, along with two of its former top figures, Allan J. Boomer and Tiffany L. Hawkins. The charges stem from the pair’s misuse of company and client assets—a breach of the trust that is meant to define fiduciary duty in the investment world.

Here’s where it gets serious: From at least August 2021 through February 2024, Hawkins, who managed a private fund alongside Boomer, exploited her position in a major way. She misappropriated roughly $223,000 from portfolio companies under the firm’s umbrella. How? By using company debit cards for over 100 personal transactions—including vacations, shopping sprees, and other expenses—that had nothing to do with business. But it doesn’t stop there. She also took more compensation than was authorized, further muddying the waters of her actions. All the while, she worked to hide her misdeeds from the firm and its accounting team, as well as from SEC investigators.

Boomer, the former managing partner, didn’t escape scrutiny. Despite obvious warning signs, he failed to oversee Hawkins’ activities and allowed her behavior to go unchecked. To make matters worse, Boomer authorized the fund to pay a business debt that should’ve been taken care of by an entity he and Hawkins controlled, giving that entity a windfall of $346,904.

In a statement, Thomas P. Smith, Jr., Associate Regional Director in the SEC’s New York office, emphasized the severity of these actions. "Hawkins and Boomer breached their fiduciary duties and misused fund and portfolio company assets for their personal gain, ultimately harming the very clients they were supposed to protect," Smith said.

The SEC’s investigation concluded that Hawkins and Boomer violated the antifraud provisions of the Investment Advisers Act of 1940, while Momentum Advisors fell short in several critical areas—specifically, failing to implement proper policies, procedures, and required audits.

As part of the settlement, Hawkins agreed to a hefty $200,000 civil penalty and will face an associational bar, meaning she can no longer associate with any investment adviser. Boomer, who will pay an $80,000 penalty, faces a 12-month suspension from supervisory duties. And for its part, Momentum Advisors has agreed to pay a $235,000 penalty and accept a formal censure.

While the financial penalties are notable, they pale in comparison to the damage done to the trust clients place in these advisers. The SEC’s actions send a strong reminder to the investment community that fiduciary duty isn’t just a term—it’s a responsibility to act with integrity and care at all times.

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