Securities and Exchange Commission v. Vista Financial Advisors LLC

Background

The Securities and Exchange Commission (SEC) sued Vista Financial Advisors LLC and Ruben Cedrick Williams on September 25, 2023, alleging that they violated the Investment Advisers Act of 1940. The opinion states that Williams is Vista Financial’s co-owner and chief executive. Williams signed waivers of service for himself and Vista Financial, and the deadline to respond to the complaint was extended several times, most recently to April 26, 2024. No lawyer had appeared for Williams or Vista Financial.

The SEC’s Request

The SEC asked the court to approve a proposed partial consent judgment based on a settlement with the defendants. The proposed judgment would resolve the nonfinancial relief sought by the SEC but leave financial relief for later resolution by motion or further settlement. Among other things, it would permanently bar the defendants from violating the federal securities laws at issue in the case.

Court’s Reasoning

The court denied the request because the proposed judgment stated that Vista Financial entered a general appearance and admitted the court’s jurisdiction, even though no lawyer had appeared for it. The court explained that, under Second Circuit precedent, a limited liability company may appear in federal court only through a licensed lawyer, even if it has one member or is owned entirely by one person. The court noted that other courts had denied similar SEC requests for consent judgments despite the possible efficiency of accepting a judgment without requiring the entity to obtain counsel.

Disposition

Judge Victor Marrero denied the SEC’s request without prejudice. The SEC may seek approval of a proposed consent judgment against Williams alone, move for a default judgment against Vista Financial, or pursue both options. The court also ordered the SEC to serve the order on Williams and Vista Financial and file certificates of service on the docket.