RIA Compliance Blog
Highlighting the importance of properly handling clients’ personal information and complying with applicable fiduciary obligations, the Securities and Exchange Commission (SEC) reached a settlement last month that resulted in a final judgment brought against Parker Terrill Austin (“Austin”), an investment adviser based in California and founder of his advisory firm, Embarcadero Capital Advisors, Inc. (“Embarcadero”). The SEC filed its complaint in the U.S. District Court for the Central District of California on September 10, 2025.
The complaint also alleged that Austin aided and abetted Embarcadero’s violation of Rule 10 of Regulation S-P (17 C.F.R. § 248.10), which requires investment advisers to maintain the privacy of client information. Among other allegations, the SEC claimed that Austin improperly handled and disclosed clients’ nonpublic personal information, including by sending such information to his personal email and forwarding it to his future business partner.
The allegations include the following:
- Transfer of Client Information: Austin allegedly sent clients’ nonpublic personal information, including names and account balances, from his previous firm to his personal email address and shared the information with his future business partner at Embarcadero.
- Access to Client Files: He allegedly directed subordinate employees to provide client files containing account balances and contact information, including phone numbers, email addresses, and home addresses.
- Transfer of CRM Records: Austin allegedly instructed an assistant to send all client contact records from his previous firm’s Customer Relationship Management (“CRM”) system to his personal email address and subsequently forwarded the information to his future business partner.
- Unapproved Investment Strategy: At his previous firm, Austin allegedly placed clients in an unapproved investment strategy without notice, increasing equity exposure and investment risk contrary to certain clients’ instructions.
- Establishment of Embarcadero: Despite signing an acknowledgment of his previous firm’s compliance policies, Austin allegedly took steps with his future business partner to establish Embarcadero while still employed by his previous firm.
According to the SEC, Austin used the client information obtained from his previous firm to solicit clients for Embarcadero and assist in developing the new firm. The SEC also alleged that Austin later falsely represented that the transfer of the information to his personal email address had been an error by his assistant.
The SEC further alleged that Austin knew or should have known that transferring client information to his personal email address violated his former firm’s compliance policies, which he had acknowledged and received periodic training on. The SEC alleged that Austin and Embarcadero violated the anti-fraud provisions of Sections 206(1), 206(2), and 207 of the Investment Advisers Act of 1940.
On August 19, 2026, the U.S. District Court for the Central District of California entered a final judgment against Austin. Austin consented to the judgment without admitting the allegations of the Complaint. The judgment permanently restrained and enjoined Austin from aiding and abetting violations of Rule 10 of Regulation S-P by knowingly or recklessly providing substantial assistance in disclosing consumers’ nonpublic personal information to nonaffiliated third parties . without providing the required notices and opportunity to opt out. The judgment also imposed a three-year bar from associating with a broker-dealer or investment adviser and a $118,225 civil penalty for the privacy violations and other alleged conduct. .
Parker MacIntyre provides legal and compliance services to investment advisers, broker-dealers, registered representatives, hedge funds, and issuers of securities, among others. Our Investment Adviser Group assists financial service providers with complex issues that arise in the course of their business, including complying with federal and state laws and rules. Please visit our Investment Adviser Practice Group page for more information.