SEC Closes Case Against Investment Adviser Stuart Frost Over More Than $14 Million in Undisclosed Fees With a $150,000 Civil Penalty
On March 24, 2026, the U.S. Securities and Exchange Commission (SEC) announced that the U.S. District Court for the Central District of California had entered a final consent judgment against investment adviser Stuart Frost on March 10, closing an enforcement case litigated for nearly seven years: Frost was permanently enjoined from violating the antifraud provisions of the Investment Advisers Act of 1940 and ordered to pay a $150,000 civil penalty.
The SEC's complaint, filed on August 13, 2019, alleged that from 2012 through 2016, Frost defrauded five private venture capital funds and the funds' investors of over $14 million by charging undisclosed and excessive incubator fees to start-up companies in which the funds invested, in breach of his fiduciary duties to his clients. The $14 million figure is the amount the complaint alleged he extracted in fees; the civil penalty imposed by the judgment is $150,000.
The final judgment permanently enjoins Frost from violating Sections 206(1), 206(2), and 206(4) of the Advisers Act and Rule 206(4)-8 thereunder. The SEC's litigation was handled by Donald Searles and Charles Canter and supervised by Stephen Kam, all of the SEC's Los Angeles Regional Office.
Source: U.S. Securities and Exchange Commission
Published by GSM · USA (original Chinese edition)
Photo: 图：位于美国华盛顿的美国证券交易委员会总部大楼正门玻璃幕墙（资料照片），石柱上刻有该机构英文全称。AgnosticPreachersKid 摄，CC BY-SA 3.0，经 Wikimedia Commons；联邦固定图库。 / Photo: The glass facade of the U.S. Securities and Exchange Commission headquarters in Washington, D.C. (file photo), with the agency's name engraved on the stone pillars. Photo by AgnosticPreachersKid, CC BY-SA 3.0, via Wikimedia Commons; federal fixed image library.
