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  DFPI vs GT Management Group, Inc
  

  On October 6, 2009, the Commissioner commenced a regulatory examination of the  books and records of GTM pursuant to section 25241 (2009 Examination). Based on the Commissioner’s findings during the 2009 Examination, on June 29, 2012, the Commissioner issued an Accusation (2012 Accusation) against GTM alleging that:

  (i) GTM and Chow offered and sold unqualified nonexempt securities in the form of limited partnership interests in GC 1050 Fund to investors, in violation of section 25110. 

  (ii) GTM and Chow acted as uncertified investment advisers prior to being issued a certificate in 2008, in violation of section 25230(a).

  (iii) GTM and Chow engaged in the business of advising clients as to the advisability of investing in, purchasing and selling securities prior to being issued a certificate in 2008, receiving more than $216,000 in compensation for their unlicensed business. 

  (iv) GTM and Chow made material misstatements and/or omissions in their  application for an investment adviser certificate, in violation of section 25245, including (a) stating that they had not provided investment advisory services to any clients during their last fiscal year when, in fact, GTM did provide such services, and had been providing such services since 2002 without a license; (b) failing to disclose the amount of assets and accounts under management during its last fiscal year; (c) stating that no related person is a general partner in an investment-related partnership or manager of an investment-related limited liability company when, in fact, Chow was managing partner for the GC 1050 Fund; and (d) failing to disclose information related to the GC 1050 Fund. 

   

  GTM failed to file financial reports since an investment adviser certificate was issued on June 30, 2008. On or about March 16, 2013, Respondents executed a settlement agreement and stipulation with the Commissioner stipulating to issuance of an “Order Suspending Investment Adviser Certificate from New Business and 1mposing Administrative Penalties Pursuant to  Corporations Code Section 25252.” (2013 Order). The 2013 Order further assessed administrative penalties against Respondents totaling $18,500 for the violations noted in the 2009 Examination. 

   

  On December 12, 2023, the Commissioner issued an Accusation with accompanying pleadings seeking to (i) revoke Respondents’ investment adviser certificates pursuant to section 25232 on the basis that Respondents unlawfully engaged in business as investment advisers by repeatedly violating several provisions of the CSL; (ii) bar Chow pursuant to section 25232.1 on the grounds that the bar is in the public interest and Chow willfully made false or misleading statements or willfully omitted to state material fact in the report filed with the Commissioner; and chow willfully violated provisions of the Securities Act of 1933, the Securities Exchange Act of 1934, or the Investment Advisers Act of 1940; and (iii) levy penalties pursuant to section 25252 (Enforcement Action). 

   

  The Parties desire to enter this Settlement Agreement which the Commissioner finds is in the public interest and consistent with the purposes fairly intended by the policies and provisions of the CSL. 

   

  Terms and Conditions

  1. Purpose. This Settlement Agreement resolves the issues before the Commissioner, set forth in paragraphs A-L above, in a manner that avoids the expense of a hearing and other possible court proceedings, protects consumers, is in the public interest, and is consistent with the purposes, policies, and provisions of the CSL.

  2. Finality of Settlement Agreement.  GTM and Chow agree to comply with this Settlement Agreement and stipulate that this Settlement Agreement is hereby deemed final.

  3. Order to Discontinue Violations.  GTM and Chow hereby agree, and the Commissioner orders, that in accordance with Corporations Code section 25249, GT Management Group, Inc. and Gary Chow will immediately discontinue the violations set forth herein.

  4. Orders Revoking Investment Adviser Certificates. Pursuant to section 25232, subdivision (e), the investment adviser certificates of GT Management Group, Inc., CRD No. 146706, and Gary Chow, CRD No. 5522751, are hereby revoked. Respondents further agree to the finality of these orders.

  5. Order Barring Chow from Employment. Pursuant to section 25232.1., Gary Chow, CRD No. 5522751 is hereby barred from any position of employment, management or control of any investment adviser, broker-dealer, or commodity adviser. Gary Chow agrees that he will not reapply for registration as an investment adviser in California for at least 10 years from the Effective Date of this Settlement Agreement as defined in paragraph 27.

  6. Penalty. Respondents shall pay to the Commissioner penalties in the amount of $50,000 no later than 30 days after the Effective Date. The penalties must be made payable in the form of a cashier’s check or Automated Clearing House deposit transmitted to the attention of Accounting – Litigation, at the Department of Financial Protection and Innovation, 2101 Arena Boulevard, Sacramento, California 95834. Notice of the payment must be concurrently sent to Uche Enenwali, Senior Counsel, Enforcement Division, by email at: uche.enenwali@dfpi.ca.gov. In the event the payment due date falls on a weekend or holiday, the payment shall be due the next business day. 

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