SEC Wins Default Judgment Against Adamant Stone After Alleged False Adviser Filings

Key Takeaways

• SEC Alleged Material Misrepresentations: The SEC alleged Adamant Stone made material misrepresentations in a September 2024 Form ADV, including claims that it qualified as an Exempt Reporting Adviser, operated from a Denver office, managed $10 million in U.S. assets, advised a private fund, and had that fund reported by another registered investment adviser.
• Investigation Could Not Corroborate Claims: According to the SEC, investigators could not verify several of the firm's representations, including its claimed Denver office and the existence of SEC reporting related to the purported private fund. The agency also alleged Adamant Stone failed to provide records supporting its Form ADV disclosures.
• $1.18 Million Civil Penalty Imposed: The court ordered Adamant Stone to pay a $1,182,254 civil penalty and permanently barred the firm, its owners, and its executive officers from filing a Form ADV as an Exempt Reporting Adviser.

Deep Dive

The U.S. Securities and Exchange Commission has secured a default judgment against Adamant Stone Limited after alleging the purported investment adviser built its regulatory profile on claims it could not support.

On July 30, the U.S. District Court for the District of Colorado permanently enjoined the firm from future violations of Sections 204(a) and 207 of the Investment Advisers Act of 1940, barred Adamant Stone, its owners, and its executive officers from filing Form ADV as an Exempt Reporting Adviser, and ordered the company to pay a civil penalty of $1,182,254.

The judgment stems from an SEC lawsuit filed in November 2025 that challenged a September 2024 Form ADV. According to the Commission, Adamant Stone represented that it qualified as an Exempt Reporting Adviser, operated from office space in Denver, managed $10 million in U.S. assets, advised a private fund, and that another registered investment adviser reported information about that fund in its own Form ADV.

The SEC alleged those representations did not withstand scrutiny. According to the complaint, the business occupying the Denver office said it had no knowledge of Adamant Stone or its purported chief executive officer. The Commission also alleged that the registered investment adviser identified in the filing had not reported information about the purported private fund. Investigators further said they found no reporting relating to the fund elsewhere in SEC filings and no information about Adamant Stone in the Commission's public company database.

The complaint also alleged that Adamant Stone failed to respond after Commission attorneys requested records supporting the statements made in its Form ADV.

Because the company did not defend the case, the court entered judgment by default, granting the SEC the relief it sought. In addition to the permanent injunctions, the order prevents Adamant Stone and its leadership from filing Form ADV as an Exempt Reporting Adviser in the future.

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