In re BiscayneAmericas Advisers

 UNITED STATES OF AMERICA 
 Before the 
 SECURITIES AND EXCHANGE COMMISSION 
 
 
INVESTMENT ADVISERS ACT OF 1940 
Release No. 6119 / September 9, 2022 
 
ADMINISTRATIVE PROCEEDING 
File No. 3-21056 
 
 
In the Matter of 
 
BiscayneAmericas Advisers 
L.L.C. 
 
Respondent. 
 
ORDER INSTITUTING ADMINISTRATIVE 
AND CEASE-AND-DESIST PROCEEDINGS, 
PURSUANT TO SECTIONS 203(e) AND 
203(k) OF THE INVESTMENT ADVISERS 
ACT OF 1940, MAKING FINDINGS, AND 
IMPOSING REMEDIAL SANCTIONS AND 
A CEASE-AND-DESIST ORDER  
   
 
I. 
 
 The Securities and Exchange Commission (“Commission”) deems it appropriate and in the 
public interest that public administrative and cease-and-desist proceedings be, and hereby are, 
instituted pursuant to Sections 203(e) and 203(k) of the Investment Advisers Act of 1940 
(“Advisers Act”) against BiscayneAmericas Advisers L.L.C. (“Biscayne” or “Respondent”).  
 
II. 
 
 In anticipation of the institution of these proceedings, Respondent has submitted an Offer 
of Settlement (the “Offer”) which the Commission has determined to accept. Solely for the purpose 
of these proceedings and any other proceedings brought by or on behalf of the Commission, or to 
which the Commission is a party, and without admitting or denying the findings herein, except as 
to the Commission’s jurisdiction over it and the subject matter of these proceedings, which are 
admitted, Respondent consents to the entry of this Order Instituting Administrative and Cease-and-
Desist Proceedings Pursuant to Sections 203(e) and 203(k) of the Investment Advisers Act of 
1940, Making Findings, and Imposing Remedial Sanctions and a Cease-and-Desist Order 
(“Order”), as set forth below. 
 
III. 
 
 On the basis of this Order and Respondent’s Offer, the Commission finds
1
 that: 
 
                                                 
1
 The findings herein are made pursuant to Respondent’s Offer and are not binding on any other person or entity in 
this or any other proceeding.  

 2 
Summary 
 
1. Biscayne, a registered investment adviser, is an investment adviser to private funds. 
This matter concerns Biscayne’s violations of the federal securities laws in connection with the 
financial statement audits of private funds that Biscayne advised. Biscayne failed to timely 
distribute annual audited financial statements prepared in accordance with Generally Accepted 
Accounting Principles (“GAAP”) to investors in certain private funds that it advised. In addition, 
Biscayne did not promptly update its Forms ADV as new events regarding those audits occurred. 
These failures resulted in violations of Section 206(4) of the Advisers Act and Rule 206(4)-2 
thereunder, commonly referred to as the “custody rule,” and Section 204(a) and Rule 204-1(a) 
thereunder, which required Biscayne to update certain information about Biscayne’s private fund 
audits in its Forms ADV.   
 
Respondent 
 
2. BiscayneAmericas Advisers L.L.C. (“Biscayne”) is a Florida limited liability 
company with its principal place of business in Miami, Florida. Biscayne has been registered with 
the Commission as an investment adviser since May 17, 1999. On its Form ADV dated March 29, 
2022, Biscayne reported that it had approximately $694 million in regulatory assets under 
management, including $677 million managed in pooled investment vehicles.  
 
Other Relevant Entities 
 
3. abl SPV, L.P. (“abl”) is a private fund formed as a Cayman Islands limited 
partnership. At all relevant times, an affiliate under common control with Biscayne was the general 
partner of abl. Biscayne has been the investment adviser to abl since March 2020. 
 
4. BA Tech Master, L.P. (“BA Tech”) is a private fund formed as a Cayman Islands 
limited partnership. At all relevant times, an affiliate under common control with Biscayne was the 
general partner of BA Tech. Biscayne has been the investment adviser to BA Tech since July 2016. 
 
5. Ngena Investment SPV, L.P. (“Ngena” , and, collectively with abl and BA Tech, the 
“Funds”) is a private fund formed as a Cayman Islands limited partnership. At all relevant times, an 
affiliate under common control with Biscayne was the general partner of Ngena. Biscayne has been 
the investment adviser to Ngena since July 2018. 
 
Biscayne Failed to Distribute Required Audited Financial Statements 
 
6. The custody rule requires that registered investment advisers who have custody of 
client funds or securities implement an enumerated set of requirements to prevent the loss, misuse, 
or misappropriation of those assets.  
 
                                                 
 

 3 
7. An investment adviser has custody of client assets if it holds, directly or indirectly, 
client funds or securities, or if it has the ability to obtain possession of those assets. See Advisers 
Act Rule 206(4)-2(d)(2). A related person of Biscayne has served as the managing member or 
general partner of the Funds at all relevant times, and has had the authority to make decisions for, 
and act on behalf of, the Funds. Biscayne is therefore deemed to have custody of each Fund’s 
assets as defined in Advisers Act Rule 206(4)-2.  
 
8. An investment adviser with custody of client assets must, among other things:  
(i) ensure that a qualified custodian maintains the client assets; (ii) notify the client in writing of 
accounts opened by the adviser at a qualified custodian on the client’s behalf; (iii) have a 
reasonable basis for believing that the qualified custodian sends account statements at least 
quarterly to clients, except if the client is a limited partnership or limited liability company for 
which the adviser or a related person is a general partner or managing member, the account 
statements must be sent to each limited partner or member; and (iv) ensure that client funds and 
securities are verified by actual examination each year by an independent public accountant at a 
time chosen by the accountant without prior notice or announcement to the adviser. See Advisers 
Act Rule 206(4)-2(a)(1)-(5).  
  
9. The custody rule provides an alternative to complying with the requirements of 
Advisers Act Rule 206(4)-2(a)(2), (3) and (4) for investment advisers to limited partnerships or 
other types of pooled investment vehicles. The custody rule provides that an investment adviser 
“shall be deemed to have complied with” the independent verification requirement and is not 
required to satisfy the notification and accounts statements delivery requirements with respect to a 
fund if the fund is subject to audit at least annually and “distributes [the fund’s] audited financial 
statements prepared in accordance with generally accepted accounting principles to all limited 
partners . . . within 120 days of the end of [the fund’s] fiscal year” (“Audited Financials 
Alternative”). See Advisers Act Rule 206(4)-2(b)(4). The accountant performing the audit must be 
an independent public accountant that is registered with, and subject to regular inspection by, the 
Public Company Accounting Oversight Board (“PCAOB”). See Advisers Act Rule 206(4)- 
2(b)(4)(ii). An investment adviser to a limited partnership that fails to meet the requirements of the 
Audited Financials Alternative to timely distribute audited financial statements prepared in 
accordance with GAAP would need to satisfy all of the requirements of Rule 206(4)-2(a)(2)-(4) in 
order to avoid violating the custody rule.  
 
10. In 2018, 2019, 2020, and 2021, with respect to Ngena, Biscayne purported to rely 
on the Audited Financials Alternative in order to comply with the custody rule, but Biscayne failed 
to timely deliver the audited financials to the Ngena’s investors. Accordingly, Biscayne did not 
satisfy the requirements of the Audited Financials Alternative in Rule 206(4)-2(b)(4) for Ngena. It 
was therefore obligated to comply with Advisers Act Rule 206(4)-2(a)(2), (3) and (4), which 
Biscayne also failed to do.  
 
11. In 2019, 2020, and 2021, with respect to BA Tech, Biscayne purported to rely on 
the Audited Financials Alternative in order to comply with the custody rule, but Biscayne failed to 
timely deliver the audited financials to BA Tech’s investors. Accordingly, Biscayne did not satisfy 
the requirements of the Audited Financials Alternative in Rule 206(4)-2(b)(4) for BA Tech. It was 

 4 
therefore obligated to comply with Advisers Act Rule 206(4)-2(a)(2), (3) and (4), which Biscayne 
also failed to do.  
 
12. In 2020 and 2021, with respect to abl, Biscayne purported to rely on the Audited 
Financials Alternative in order to comply with the custody rule, but Biscayne failed to timely 
deliver the audited financials to abl’s investors. Accordingly, Biscayne did not satisfy the 
requirements of the Audited Financials Alternative in Rule 206(4)-2(b)(4) for abl. It was therefore 
obligated to comply with Advisers Act Rule 206(4)-2(a)(2), (3) and (4), which Biscayne also failed 
to do. 
 
Biscayne Failed to Promptly Amend Information  
In Its Forms ADV Concerning the Private Fund Audits 
 
13. Item 7.B of Form ADV, Part 1A requires an investment adviser to state whether it 
is an adviser to any private fund. In that case, the adviser must also complete Section 7.B.(1) of 
Form ADV, Part 1A, Schedule D.  
 
14. Section 7.B.23.(a) requires an investment adviser to disclose the following 
information for each private fund managed by the adviser:  (i) whether the private fund’s financial 
statements are subject to an annual audit (Section 7.B.23.(a)(1)); (ii) whether those financial 
statements, if annually audited, are prepared in accordance with GAAP (Section 7.B.23.(a)(2)); 
(iii) an identification of the auditing firm and whether the firm is an independent public accountant 
registered with the PCAOB that is subject to the PCAOB’s regular inspection (Section 7.B.23.(a), 
(b), (d), (e), and (f)); and (iv) whether the private fund’s audited financial statements for the most 
recently completed fiscal year have been distributed to fund investors (Section 7.B.23.(g)).       
 
15. Last, Section 7.B.23.(h) requires an investment adviser to state whether all of the 
audit reports prepared by the auditing firm for each of its advised funds, since the adviser’s last 
annual updating amendment, contained unqualified audit opinions. In Section 7.B.23.(h), the 
private fund investment adviser must state “Yes,” “No,” or “Report Not Yet Received.”      
 
16. Section 204(a) of the Advisers Act and Rule 204-1(a) thereunder require a 
registered investment adviser to amend its Form ADV at least annually, and more frequently as 
required by the instructions to Form ADV. In addition, the instructions to Form ADV, Part 1A, 
Schedule D, Section 7.B.23.(h) state that “If you check ‘Report Not Yet Received,’ you must 
promptly file an amendment to your Form ADV to update your response when the report is 
available.”  
 
17. In its Form ADV filings dated March 27, 2019, March 27, 2020, and March 31, 
2021, Part 1A, Schedule D, Section 7.B., paragraph 23(h), concerning Ngena, Biscayne stated 
“Report Not Yet Received” to the question, “Do all of the reports prepared by the auditing firm for 
the private fund since your last updating amendment contain unqualified opinions?”  Biscayne 
received audit opinions for Ngena on July 1, 2019, June 26, 2020, and May 20, 2021, respectively. 
However, Biscayne did not update or revise its Forms ADV until its next annual updating 
amendments (approximately 8-10 months after receiving the audit opinions).  

 5 
 
Violations 
 
18. As a result of the conduct described above, Biscayne willfully
2
 violated Sections 
204(a) and 206(4) of the Advisers Act and Rules 204-1(a) and 206(4)-2 thereunder. 
 
IV. 
 In view of the foregoing, the Commission deems it appropriate and in the public interest to 
impose the sanctions agreed to in Respondent Biscayne’s Offer. 
 
 Accordingly, pursuant to Sections 203(e) and 203(k) of the Advisers Act, it is hereby 
ORDERED that: 
 
 A. Respondent cease and desist from committing or causing any violations and any 
future violations of Sections 204(a) and 206(4) of the Advisers Act and Rules 204-1(a) and 206(4)-2 
thereunder. 
 
B. Respondent is censured. 
 
C. Respondent shall pay a civil money penalty in the amount of $135,000 to the 
Securities and Exchange Commission for transfer to the general fund of the United States 
Treasury, subject to Securities Exchange Act of 1934 Section 21F(g)(3). If timely payment is not 
made, additional interest shall accrue pursuant to 31 U.S.C. §3717. Payment shall be made in the 
following installments:  $33,750 within 10 days of entry of this Order; $33,750 within 120 days of 
entry of this Order; $33,750 within 240 days of entry of this Order; and $33,750 within 360 days of 
entry of this Order. Payments shall be applied first to post order interest, which accrues pursuant to 
31 U.S.C. 3717. Prior to making the final payment set forth herein, Respondent shall contact the 
staff of the Commission for the amount due. If Respondent fails to make any payment by the date 
agreed and/or in the amount agreed according to the schedule set forth above, all outstanding 
payments under this Order, including post-order interest, minus any payments made, shall become 
due and payable immediately at the discretion of the staff of the Commission without further 
application to the Commission. 
 
Payment must be made in one of the following ways:   
 
(1) Respondent may transmit payment electronically to the Commission, which 
will provide detailed ACH transfer/Fedwire instructions upon request;  
                                                 
2
 “Willfully,” for purposes of imposing relief under Section 203(e) of the Advisers Act “‘means no more than that the 
person charged with the duty knows what he is doing.’”  Wonsover v. SEC, 205 F.3d 408, 414 (D.C. Cir. 2000) 
(quoting Hughes v. SEC, 174 F.2d 969, 977 (D.C. Cir. 1949)). There is no requirement that the actor “also be aware 
that he is violating one of the Rules or Acts.”  Tager v. SEC, 344 F.2d 5, 8 (2d Cir. 1965). The decision in The Robare 
Group, Ltd. v. SEC, which construed the term “willfully” for purposes of a differently structured statutory provision, 
does not alter that standard. 922 F.3d 468, 478-79 (D.C. Cir. 2019) (setting forth the showing required to establish that 
a person has “willfully omit[ted]” material information from a required disclosure in violation of Section 207 of the 
Advisers Act). 

 6 
 
(2) Respondent may make direct payment from a bank account via Pay.gov 
through the SEC website at http://www.sec.gov/about/offices/ofm.htm; or  
 
(3) Respondent may pay by certified check, bank cashier’s check, or United 
States postal money order, made payable to the Securities and Exchange 
Commission and hand-delivered or mailed to:  
 
Enterprise Services Center 
Accounts Receivable Branch 
HQ Bldg., Room 181, AMZ-341 
6500 South MacArthur Boulevard 
Oklahoma City, OK 73169 
 
Payments by check or money order must be accompanied by a cover letter identifying 
Biscayne as a Respondent in these proceedings, and the file number of these proceedings; a copy 
of the cover letter and check or money order must be sent to Kimberly L. Frederick, Assistant 
Regional Director, Denver Regional Office, Securities and Exchange Commission, 1961 Stout 
Street, Suite 1700, Denver, CO 80294.  
 
 D. Amounts ordered to be paid as civil money penalties pursuant to this Order shall be 
treated as penalties paid to the government for all purposes, including all tax purposes. To preserve 
the deterrent effect of the civil penalty, Respondent agrees that in any Related Investor Action, it 
shall not argue that it is entitled to, nor shall it benefit by, offset or reduction of any award of 
compensatory damages by the amount of any part of Respondent’s payment of a civil penalty in 
this action (“Penalty Offset”). If the court in any Related Investor Action grants such a Penalty 
Offset, Respondent agrees that it shall, within 30 days after entry of a final order granting the 
Penalty Offset, notify the Commission’s counsel in this action and pay the amount of the Penalty 
Offset to the Securities and Exchange Commission. Such a payment shall not be deemed an 
additional civil penalty and shall not be deemed to change the amount of the civil penalty imposed 
in this proceeding. For purposes of this paragraph, a “Related Investor Action” means a private 
damages action brought against Respondent by or on behalf of one or more investors based on 
substantially the same facts as alleged in the Order instituted by the Commission in this 
proceeding. 
 
 By the Commission. 
 
 
 
Vanessa A. Countryman 
       Secretary 
 
 
 

UNITED STATES OF AMERICA 

 Before the 

 SECURITIES AND EXCHANGE COMMISSION 

 

 

INVESTMENT ADVISERS ACT OF 1940 

Release No. 6119 / September 9, 2022 

 

ADMINISTRATIVE PROCEEDING 

File No. 3-21056 

 

 

In the Matter of 

 

BiscayneAmericas Advisers 

L.L.C. 

 

Respondent. 

 

ORDER INSTITUTING ADMINISTRATIVE 

AND CEASE-AND-DESIST PROCEEDINGS, 

PURSUANT TO SECTIONS 203(e) AND 

203(k) OF THE INVESTMENT ADVISERS 

ACT OF 1940, MAKING FINDINGS, AND 

IMPOSING REMEDIAL SANCTIONS AND 

A CEASE-AND-DESIST ORDER  

   

 

I. 
 

 The Securities and Exchange Commission (“Commission”) deems it appropriate and in the 

public interest that public administrative and cease-and-desist proceedings be, and hereby are, 

instituted pursuant to Sections 203(e) and 203(k) of the Investment Advisers Act of 1940 

(“Advisers Act”) against BiscayneAmericas Advisers L.L.C. (“Biscayne” or “Respondent”).  

 

II. 
 

 In anticipation of the institution of these proceedings, Respondent has submitted an Offer 

of Settlement (the “Offer”) which the Commission has determined to accept. Solely for the purpose 

of these proceedings and any other proceedings brought by or on behalf of the Commission, or to 

which the Commission is a party, and without admitting or denying the findings herein, except as 

to the Commission’s jurisdiction over it and the subject matter of these proceedings, which are 

admitted, Respondent consents to the entry of this Order Instituting Administrative and Cease-and-

Desist Proceedings Pursuant to Sections 203(e) and 203(k) of the Investment Advisers Act of 

1940, Making Findings, and Imposing Remedial Sanctions and a Cease-and-Desist Order 

(“Order”), as set forth below. 

 

III. 
 

 On the basis of this Order and Respondent’s Offer, the Commission finds1 that: 

 

                                                 
1 The findings herein are made pursuant to Respondent’s Offer and are not binding on any other person or entity in 

this or any other proceeding.  



 2 

Summary 
 

1. Biscayne, a registered investment adviser, is an investment adviser to private funds. 

This matter concerns Biscayne’s violations of the federal securities laws in connection with the 

financial statement audits of private funds that Biscayne advised. Biscayne failed to timely 

distribute annual audited financial statements prepared in accordance with Generally Accepted 

Accounting Principles (“GAAP”) to investors in certain private funds that it advised. In addition, 

Biscayne did not promptly update its Forms ADV as new events regarding those audits occurred. 

These failures resulted in violations of Section 206(4) of the Advisers Act and Rule 206(4)-2 

thereunder, commonly referred to as the “custody rule,” and Section 204(a) and Rule 204-1(a) 

thereunder, which required Biscayne to update certain information about Biscayne’s private fund 

audits in its Forms ADV.   

 

Respondent 

 

2. BiscayneAmericas Advisers L.L.C. (“Biscayne”) is a Florida limited liability 

company with its principal place of business in Miami, Florida. Biscayne has been registered with 

the Commission as an investment adviser since May 17, 1999. On its Form ADV dated March 29, 

2022, Biscayne reported that it had approximately $694 million in regulatory assets under 

management, including $677 million managed in pooled investment vehicles.  

 

Other Relevant Entities 

 

3. abl SPV, L.P. (“abl”) is a private fund formed as a Cayman Islands limited 

partnership. At all relevant times, an affiliate under common control with Biscayne was the general 

partner of abl. Biscayne has been the investment adviser to abl since March 2020. 

 

4. BA Tech Master, L.P. (“BA Tech”) is a private fund formed as a Cayman Islands 

limited partnership. At all relevant times, an affiliate under common control with Biscayne was the 

general partner of BA Tech. Biscayne has been the investment adviser to BA Tech since July 2016. 

 

5. Ngena Investment SPV, L.P. (“Ngena” , and, collectively with abl and BA Tech, the 

“Funds”) is a private fund formed as a Cayman Islands limited partnership. At all relevant times, an 

affiliate under common control with Biscayne was the general partner of Ngena. Biscayne has been 

the investment adviser to Ngena since July 2018. 

 

Biscayne Failed to Distribute Required Audited Financial Statements 

 

6. The custody rule requires that registered investment advisers who have custody of 

client funds or securities implement an enumerated set of requirements to prevent the loss, misuse, 

or misappropriation of those assets.  

 

                                                 

 



 3 

7. An investment adviser has custody of client assets if it holds, directly or indirectly, 

client funds or securities, or if it has the ability to obtain possession of those assets. See Advisers 

Act Rule 206(4)-2(d)(2). A related person of Biscayne has served as the managing member or 

general partner of the Funds at all relevant times, and has had the authority to make decisions for, 

and act on behalf of, the Funds. Biscayne is therefore deemed to have custody of each Fund’s 

assets as defined in Advisers Act Rule 206(4)-2.  

 

8. An investment adviser with custody of client assets must, among other things:  

(i) ensure that a qualified custodian maintains the client assets; (ii) notify the client in writing of 

accounts opened by the adviser at a qualified custodian on the client’s behalf; (iii) have a 

reasonable basis for believing that the qualified custodian sends account statements at least 

quarterly to clients, except if the client is a limited partnership or limited liability company for 

which the adviser or a related person is a general partner or managing member, the account 

statements must be sent to each limited partner or member; and (iv) ensure that client funds and 

securities are verified by actual examination each year by an independent public accountant at a 

time chosen by the accountant without prior notice or announcement to the adviser. See Advisers 

Act Rule 206(4)-2(a)(1)-(5).  

  

9. The custody rule provides an alternative to complying with the requirements of 

Advisers Act Rule 206(4)-2(a)(2), (3) and (4) for investment advisers to limited partnerships or 

other types of pooled investment vehicles. The custody rule provides that an investment adviser 

“shall be deemed to have complied with” the independent verification requirement and is not 

required to satisfy the notification and accounts statements delivery requirements with respect to a 

fund if the fund is subject to audit at least annually and “distributes [the fund’s] audited financial 

statements prepared in accordance with generally accepted accounting principles to all limited 

partners . . . within 120 days of the end of [the fund’s] fiscal year” (“Audited Financials 

Alternative”). See Advisers Act Rule 206(4)-2(b)(4). The accountant performing the audit must be 

an independent public accountant that is registered with, and subject to regular inspection by, the 

Public Company Accounting Oversight Board (“PCAOB”). See Advisers Act Rule 206(4)- 

2(b)(4)(ii). An investment adviser to a limited partnership that fails to meet the requirements of the 

Audited Financials Alternative to timely distribute audited financial statements prepared in 

accordance with GAAP would need to satisfy all of the requirements of Rule 206(4)-2(a)(2)-(4) in 

order to avoid violating the custody rule.  

 

10. In 2018, 2019, 2020, and 2021, with respect to Ngena, Biscayne purported to rely 

on the Audited Financials Alternative in order to comply with the custody rule, but Biscayne failed 

to timely deliver the audited financials to the Ngena’s investors. Accordingly, Biscayne did not 

satisfy the requirements of the Audited Financials Alternative in Rule 206(4)-2(b)(4) for Ngena. It 

was therefore obligated to comply with Advisers Act Rule 206(4)-2(a)(2), (3) and (4), which 

Biscayne also failed to do.  

 

11. In 2019, 2020, and 2021, with respect to BA Tech, Biscayne purported to rely on 

the Audited Financials Alternative in order to comply with the custody rule, but Biscayne failed to 

timely deliver the audited financials to BA Tech’s investors. Accordingly, Biscayne did not satisfy 

the requirements of the Audited Financials Alternative in Rule 206(4)-2(b)(4) for BA Tech. It was 



 4 

therefore obligated to comply with Advisers Act Rule 206(4)-2(a)(2), (3) and (4), which Biscayne 

also failed to do.  

 

12. In 2020 and 2021, with respect to abl, Biscayne purported to rely on the Audited 

Financials Alternative in order to comply with the custody rule, but Biscayne failed to timely 

deliver the audited financials to abl’s investors. Accordingly, Biscayne did not satisfy the 

requirements of the Audited Financials Alternative in Rule 206(4)-2(b)(4) for abl. It was therefore 

obligated to comply with Advisers Act Rule 206(4)-2(a)(2), (3) and (4), which Biscayne also failed 

to do. 

 

Biscayne Failed to Promptly Amend Information  

In Its Forms ADV Concerning the Private Fund Audits 

 

13. Item 7.B of Form ADV, Part 1A requires an investment adviser to state whether it 

is an adviser to any private fund. In that case, the adviser must also complete Section 7.B.(1) of 

Form ADV, Part 1A, Schedule D.  

 

14. Section 7.B.23.(a) requires an investment adviser to disclose the following 

information for each private fund managed by the adviser:  (i) whether the private fund’s financial 

statements are subject to an annual audit (Section 7.B.23.(a)(1)); (ii) whether those financial 

statements, if annually audited, are prepared in accordance with GAAP (Section 7.B.23.(a)(2)); 

(iii) an identification of the auditing firm and whether the firm is an independent public accountant 

registered with the PCAOB that is subject to the PCAOB’s regular inspection (Section 7.B.23.(a), 

(b), (d), (e), and (f)); and (iv) whether the private fund’s audited financial statements for the most 

recently completed fiscal year have been distributed to fund investors (Section 7.B.23.(g)).       

 

15. Last, Section 7.B.23.(h) requires an investment adviser to state whether all of the 

audit reports prepared by the auditing firm for each of its advised funds, since the adviser’s last 

annual updating amendment, contained unqualified audit opinions. In Section 7.B.23.(h), the 

private fund investment adviser must state “Yes,” “No,” or “Report Not Yet Received.”      

 

16. Section 204(a) of the Advisers Act and Rule 204-1(a) thereunder require a 

registered investment adviser to amend its Form ADV at least annually, and more frequently as 

required by the instructions to Form ADV. In addition, the instructions to Form ADV, Part 1A, 

Schedule D, Section 7.B.23.(h) state that “If you check ‘Report Not Yet Received,’ you must 

promptly file an amendment to your Form ADV to update your response when the report is 

available.”  

 

17. In its Form ADV filings dated March 27, 2019, March 27, 2020, and March 31, 

2021, Part 1A, Schedule D, Section 7.B., paragraph 23(h), concerning Ngena, Biscayne stated 

“Report Not Yet Received” to the question, “Do all of the reports prepared by the auditing firm for 

the private fund since your last updating amendment contain unqualified opinions?”  Biscayne 

received audit opinions for Ngena on July 1, 2019, June 26, 2020, and May 20, 2021, respectively. 

However, Biscayne did not update or revise its Forms ADV until its next annual updating 

amendments (approximately 8-10 months after receiving the audit opinions).  



 5 

 

Violations 

 

18. As a result of the conduct described above, Biscayne willfully2 violated Sections 

204(a) and 206(4) of the Advisers Act and Rules 204-1(a) and 206(4)-2 thereunder. 

 

IV. 

 In view of the foregoing, the Commission deems it appropriate and in the public interest to 

impose the sanctions agreed to in Respondent Biscayne’s Offer. 

 

 Accordingly, pursuant to Sections 203(e) and 203(k) of the Advisers Act, it is hereby 

ORDERED that: 

 

 A. Respondent cease and desist from committing or causing any violations and any 

future violations of Sections 204(a) and 206(4) of the Advisers Act and Rules 204-1(a) and 206(4)-2 

thereunder. 

 

B. Respondent is censured. 

 

C. Respondent shall pay a civil money penalty in the amount of $135,000 to the 

Securities and Exchange Commission for transfer to the general fund of the United States 

Treasury, subject to Securities Exchange Act of 1934 Section 21F(g)(3). If timely payment is not 

made, additional interest shall accrue pursuant to 31 U.S.C. §3717. Payment shall be made in the 

following installments:  $33,750 within 10 days of entry of this Order; $33,750 within 120 days of 

entry of this Order; $33,750 within 240 days of entry of this Order; and $33,750 within 360 days of 

entry of this Order. Payments shall be applied first to post order interest, which accrues pursuant to 

31 U.S.C. 3717. Prior to making the final payment set forth herein, Respondent shall contact the 

staff of the Commission for the amount due. If Respondent fails to make any payment by the date 

agreed and/or in the amount agreed according to the schedule set forth above, all outstanding 

payments under this Order, including post-order interest, minus any payments made, shall become 

due and payable immediately at the discretion of the staff of the Commission without further 

application to the Commission. 

 

Payment must be made in one of the following ways:   

 

(1) Respondent may transmit payment electronically to the Commission, which 

will provide detailed ACH transfer/Fedwire instructions upon request;  

                                                 
2 “Willfully,” for purposes of imposing relief under Section 203(e) of the Advisers Act “‘means no more than that the 

person charged with the duty knows what he is doing.’”  Wonsover v. SEC, 205 F.3d 408, 414 (D.C. Cir. 2000) 

(quoting Hughes v. SEC, 174 F.2d 969, 977 (D.C. Cir. 1949)). There is no requirement that the actor “also be aware 

that he is violating one of the Rules or Acts.”  Tager v. SEC, 344 F.2d 5, 8 (2d Cir. 1965). The decision in The Robare 

Group, Ltd. v. SEC, which construed the term “willfully” for purposes of a differently structured statutory provision, 

does not alter that standard. 922 F.3d 468, 478-79 (D.C. Cir. 2019) (setting forth the showing required to establish that 

a person has “willfully omit[ted]” material information from a required disclosure in violation of Section 207 of the 

Advisers Act). 



 6 

 

(2) Respondent may make direct payment from a bank account via Pay.gov 

through the SEC website at http://www.sec.gov/about/offices/ofm.htm; or  

 

(3) Respondent may pay by certified check, bank cashier’s check, or United 

States postal money order, made payable to the Securities and Exchange 

Commission and hand-delivered or mailed to:  

 

Enterprise Services Center 

Accounts Receivable Branch 

HQ Bldg., Room 181, AMZ-341 

6500 South MacArthur Boulevard 

Oklahoma City, OK 73169 

 

Payments by check or money order must be accompanied by a cover letter identifying 

Biscayne as a Respondent in these proceedings, and the file number of these proceedings; a copy 

of the cover letter and check or money order must be sent to Kimberly L. Frederick, Assistant 

Regional Director, Denver Regional Office, Securities and Exchange Commission, 1961 Stout 

Street, Suite 1700, Denver, CO 80294.  

 

 D. Amounts ordered to be paid as civil money penalties pursuant to this Order shall be 

treated as penalties paid to the government for all purposes, including all tax purposes. To preserve 

the deterrent effect of the civil penalty, Respondent agrees that in any Related Investor Action, it 

shall not argue that it is entitled to, nor shall it benefit by, offset or reduction of any award of 

compensatory damages by the amount of any part of Respondent’s payment of a civil penalty in 

this action (“Penalty Offset”). If the court in any Related Investor Action grants such a Penalty 

Offset, Respondent agrees that it shall, within 30 days after entry of a final order granting the 

Penalty Offset, notify the Commission’s counsel in this action and pay the amount of the Penalty 

Offset to the Securities and Exchange Commission. Such a payment shall not be deemed an 

additional civil penalty and shall not be deemed to change the amount of the civil penalty imposed 

in this proceeding. For purposes of this paragraph, a “Related Investor Action” means a private 

damages action brought against Respondent by or on behalf of one or more investors based on 

substantially the same facts as alleged in the Order instituted by the Commission in this 

proceeding. 

 

 By the Commission. 

 

 

 

Vanessa A. Countryman 

       Secretary 

 

 

 

http://www.sec.gov/about/offices/ofm.htm