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SEC Sanctions Dunham & Associates

The Securities and Exchange Commission sanctioned Jeffrey Dunham, his San Diego investment company Dunham & Associates Investment Counsel Inc., and its related entities, for violating federal securities laws by improperly soliciting more than $350 million from investors.

According to an SEC cease and desist order that was released Sept. 25, the SEC found that from August 1999 to November 2004, the Dunham companies structured a common trust fund and 13 other unregistered mutual funds in an unsuccessful attempt to avoid the regulatory and registration requirements of federal securities laws.

As of Dec. 31, 2003, nearly 1,700 investors had invested more than $350 million in the common trust fund, which invested exclusively in the 13 unregistered funds.

“The investors who invested with these entities did not receive fundamental investment information to which they were entitled under federal securities laws,” the SEC order stated.

The order, which Dunham and other entities agreed to without admitting or denying the findings, comes with an agreement to stop the violations, and includes the payment of civil penalties by Dunham & Associates Investment Counsel of $150,000 and of Dunham personally of $50,000.

Jeffrey Dunham said since 1985 his firm has used private funds to manage client assets, but as the firm grew, it has since converted to a public funds structure, which is what regulators desire.

“The allegations concerned the registration of private funds,” Dunham said. “There was never any investor complaints of lost money, harm, lack of liquidity or improper valuations. We are happy to have this behind us.”

According to the Business Journal’s 2006 Book of Lists, Dunham & Associates Investment Counsel ranked No. 11 among money management firms with total managed assets of $537.5 million as of its 2004 fiscal year.

, Mike Allen

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