SEC v. DOW ROCKWELL LLC; and RICHARD DOW ROCKWELL, No. 3:22-cv-02069, Northern District of California (Apr. 1, 2022)

COMPLAINT
SEC
 V. DOW ROCKWELL LLC AND RICHARD DOW
ROCKWELL

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MONIQUE C. WINKLER (Cal. Bar No. 213031)
BERNARD B. SMYTH (Cal. Bar No. 217741)
  [email protected]
TRACY L. DAVIS (Cal. Bar No. 184129)
    [email protected]

Attorneys for Plaintiff
SECURITIES AND EXCHANGE COMMISSION
44 Montgomery Street, Suite 2800
San Francisco, CA 94104
Telephone: (415) 705-2500
Facsimile: (415) 705-2501
SECURITIES AND EXCHANGE COMMISSION,

                        Plaintiff,

            v.

DOW ROCKWELL LLC AND RICHARD DOW
ROCKWELL,

  Defendants.

Case No.

COMPLAINT

Plaintiff Securities and Exchange Commission (the “Commission”) alleges:
SUMMARY OF THE ACTION
1. From at least September 2017 through May 2020 (the “relevant period”), Dow
Rockwell LLC and its sole principal Richard Dow Rockwell (“Rockwell”) acted as unregistered
brokers on behalf of Professional Financial Investors, Inc. (“PFI”), a real estate investment and
management company in Marin, California.  Through the actions of Rockwell, California-
registered investment adviser Dow Rockwell LLC raised approximately $8 million for PFI from
UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF CALIFORNIA
SAN FRANCISCO DIVISION

COMPLAINT
SEC
 V. DOW ROCKWELL LLC AND RICHARD DOW
ROCKWELL

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the offer and sale of securities in unregistered transactions to their advisory clients in California,
Louisiana and Nevada.  PFI paid Rockwell and Dow Rockwell LLC a five percent commission
for the investor funds they solicited.  In total, over the relevant period, Rockwell and Dow
Rockwell LLC earned approximately $400,000 in transaction-based commissions or “referral
fees” from their sales of PFI securities, which constituted nearly 40% of Dow Rockwell LLC’s
total revenue in 2019 and 2020, and more than 25% of Dow Rockwell LLC’s revenue in 2018.
2. Rockwell and Dow Rockwell LLC made false and misleading statements when
offering the PFI investments to their clients.  For example, Rockwell and Dow Rockwell LLC
falsely told investors that Dow Rockwell LLC did not receive transaction-based compensation,
but was rather compensated solely through advisory fees that it charged its clients.  In fact, as
Rockwell and Dow Rockwell LLC knew, PFI compensated them based on a percentage of the
price their clients paid to purchase the securities and that these referral fees they earned from PFI
were substantially higher than the management fees they charged their advisory clients for most
other investment types.  The failure to disclose this compensation constituted an undisclosed
conflict of interest because the compensation Rockwell and Dow Rockwell LLC received for
selling PFI securities incentivized Rockwell and Dow Rockwell LLC to recommend PFI to their
clients instead of other possible investments.
3. Over the relevant period, Rockwell and Dow Rockwell LLC also failed to
disclose to the investors they solicited to purchase PFI securities the past criminal conviction of
PFI’s founder, who
exerted significant control over PFI’s operations until the founder’s death in
May 2020
.  As a result, Rockwell and Dow Rockwell LLC’s clients failed to fully appreciate the
risks associated with their investments in PFI.
4. Although PFI marketed its securities to investors as safe alternatives to the stock
market that were secured by large cash reserves and that would yield regular returns, in reality
PFI operated as a fraud.  PFI’s now-deceased founder and its president collectively
misappropriated more than $35 million from PFI’s investors as part of a larger fraudulent scheme
in which hundreds of millions of dollars were raised from more than 1,300 investors.

COMPLAINT
SEC
 V. DOW ROCKWELL LLC AND RICHARD DOW
ROCKWELL

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PFI’s fraudulent scheme began to unravel shortly after the death of its founder on May 6, 2020.
PFI is currently in Chapter 11 bankruptcy in the Bankruptcy Court for the Northern District of
California, leaving many of Rockwell and Dow Rockwell LLC’s clients, as well as thousands of
other investors, with hundreds of millions of dollars in collective losses.  Many of Dow
Rockwell LLC’s clients invested their retirement savings in PFI.
5. During the time they offered and sold PFI securities, neither Rockwell nor Dow
Rockwell LLC was registered as a broker-dealer with the Commission or associated with a
registered broker-dealer. Additionally, PFI did not register its securities offering with the
Commission, and there was no applicable exemption from registration for PFI’s securities.
6. Defendants Rockwell and Dow Rockwell LLC have violated, and unless
restrained and enjoined will continue to violate, Sections 5(a) and 5(c) of the Securities Act of
1933 (“Securities Act”) [15 U.S.C. §§ 77e(a) and 77e(c)], Section 15(a)(1) of the Securities
Exchange Act of 1934 (“Exchange Act”) [15 U.S.C. § 78o(a)(1)] and Sections 206(1), 206(2)
and 207 of Investment Advisers Act of 1940 (“Advisers Act”) [15 U.S.C. §§ 80b-6(1), 80b-6(2)
and 80b-7].  The Commission seeks an injunction against Rockwell and Dow Rockwell LLC
from future violations of these provisions, as well as disgorgement of ill-gotten gains,
prejudgment interest on disgorgement, and civil money penalties.
JURISDICTION AND VENUE
7. The Commission brings this action pursuant to Sections 20(b), 20(d) and 22(a) of
the Securities Act  [15 U.S.C. §§ 77t(b), 77t(d) and 77v(a)], Sections 21(d), 21(e) and 27 of the
Exchange Act [15 U.S.C. §§ 78u(d), 78u(e) and 78aa] and Sections 209(d) and 209(e) of the
Advisers Act [15 U.S.C. §§ 80b-9(d) and 80b-9(e)].
8. This Court has jurisdiction over this action pursuant to Sections 20(b), 20(d)(1)
and 22(a) of the Securities Act [15 U.S.C. §§ 77t(b), 77t(d)(1), and 77v(a)], Sections 21(d), 21(e)
and 27 of the Exchange Act [15 U.S.C. §§ 78u(d), 78u(e) and 78aa] and Sections 209(d), 209(e)
and 214 of the Advisers Act [15 U.S.C. §§ 80b-9(d), 80b-9(e) and 80b-14].

COMPLAINT
SEC
 V. DOW ROCKWELL LLC AND RICHARD DOW
ROCKWELL

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9. Defendants Rockwell and Dow Rockwell LLC, directly or indirectly, made use
of the means and instrumentalities of interstate commerce or of the mails in connection with the
acts, transactions, practices, and courses of business alleged in this complaint.
10. Venue is proper in this District pursuant to Section 22(a) of the Securities Act
[15 U.S.C. § 77v(a)], Section 27(a) of the Exchange Act [15 U.S.C. § 78aa(a)] and Section 214
of the Advisers Act [15 U.S.C. § 80b-14].  Acts, transactions, practices, and courses of business
that form the basis for the violations alleged in this complaint occurred in this District.
Defendants met with and solicited prospective investors in this District, and offers and sales of
securities took place in this District.
11. Under Civil Local Rule 3-2(d), this civil action should be assigned to the San
Francisco Division, because a substantial part of the events or omissions which give rise to the
claims alleged herein occurred in Marin County.
DEFENDANTS
12. Dow Rockwell LLC is a California limited liability company formed in 2005,
with its principal place of business in San Rafael, California.  Dow Rockwell LLC has been
registered in California as an investment adviser since 2005.  During the relevant period, Dow
Rockwell LLC served as an investment adviser to approximately 50 individual retail clients and
had approximately $2-3 million in assets under management.  Dow Rockwell LLC specialized in
helping its clients prepare for retirement and charged clients annual advisory fees of 0.3-0.5%
during the relevant period.
13. Richard Rockwell, age 62, resides in Marin, California.  Since 2005, Rockwell
has been the principal of Dow Rockwell LLC and has managed and controlled its operations.  He
was not registered as a broker-dealer or associated with any registered broker-dealer during the
time he sold PFI’s securities.  Rockwell has held Series 7, 24, 63 and 66 securities licenses.
Currently, only his Series 7 license remains active.  Rockwell also holds a California insurance
license.

COMPLAINT
SEC
 V. DOW ROCKWELL LLC AND RICHARD DOW
ROCKWELL

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RELATED ENTITY
14. Professional Financial Investors, Inc. is a California corporation based in
Novato, California.  PFI is a real estate investment and management firm specializing in multi-
unit residential and commercial real estate in Northern California.  On July 26, 2020, PFI filed a
voluntary Chapter 11 bankruptcy petition in the Bankruptcy Court for the Northern District of
California.
FACTUAL ALLEGATIONS
A. Background of PFI and the Securities Offered and Sold
15. PFI was founded in 1990 by Kenneth J. Casey, who died on May 6, 2020.  It was
founded as a real estate investment and management firm specializing in multi-unit residential
and commercial properties in Northern California.
16. Casey served as the sole director, officer and shareholder of PFI until 1998, when
he relinquished his corporate positions and Lewis Wallach took over as president of PFI.
Despite relinquishing his corporate positions, Casey continued to exert significant control over
PFI until his death.  Wallach continued to serve as president of PFI until June 2020, when he was
forced to resign because of his role in the fraudulent scheme.
17. Together PFI and its related entities own a direct or indirect interest in
approximately 70 residential and commercial real properties in California, including equity
interests in limited liability companies (together, the “LLCs”) that hold either fee title or an
interest as tenant-in-common in various real properties and general partner interests in limited
partnerships (together, the “LPs”) that hold fee title to various real properties in California.
18. Since at least September 2017 through May 2020, at the direction of Casey and
Wallach, PFI raised funds from investors through the offer and sale of membership interests in
various LLCs.  Investors were told that the interest payments and equity distributions for all of
the securities offered and sold by PFI were to be made based on the income generated by PFI’s
management of the underlying real property, including collection of rents from tenants.

COMPLAINT
SEC
 V. DOW ROCKWELL LLC AND RICHARD DOW
ROCKWELL

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B.        PFI’s        Fraudulent        Scheme
19. From at least June 2011 to May 2020, PFI raised hundreds of millions of dollars
from more than 1,300 investors through the offer and sale of the securities described above.  A
significant portion of those investors are elderly and invested IRA or other retirement funds.
Many investors relied on investment returns to pay their daily living expenses.
20. While soliciting investments, PFI’s principals made numerous false and
misleading statements, including falsely telling investors that their monies would be primarily
used to purchase real property and make improvements to real property already owned by PFI.
21. Contrary to these representations, a substantial portion of investor funds were
used in a Ponzi-like fashion to pay back previous investors or to cover operating losses at PFI
and its related entities.  For example, between September 2015 and May 2020 – a period in
which PFI and its related entities raised approximately $330 million from investors – over $150
million was used to pay interest to prior investors, pay certain investors principal and cover the
operating losses of PFI.
22. In addition to the Ponzi-like scheme, Casey and Wallach collectively
misappropriated more than $35 million in investor funds.  Both men treated PFI’s bank accounts
as their personal funds, accessing them regularly to use investor monies for their own personal
enrichment, including such expenses as personal tax obligations and renovations of their
personal residences.
23. Casey and Wallach also misrepresented the safety and liquidity of the securities
offered and sold by PFI, falsely telling investors that their investments were liquid and could be
cashed out at any time, with as little as a few days’ notice, and that PFI maintained substantial
reserve funds for that purpose.  Contrary to their representations, PFI lacked adequate cash to
meet their obligations without bringing in new investor funds, let alone cash sufficient to provide
liquidity to investors seeking to withdraw their investments on short notice.

COMPLAINT
SEC
 V. DOW ROCKWELL LLC AND RICHARD DOW
ROCKWELL

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C. Dow Rockwell LLC and Rockwell’s Receipt of Compensation Related to PFI
Investments
24. Dow Rockwell LLC has been registered in California as an investment adviser
since 2005.  It was never registered as a broker-dealer.  Rockwell was associated with various
registered broker-dealers from 2004 to 2005 and 2006 to 2010, but has not been associated with
a registered broker-dealer since then.
25. In approximately September 2017, Rockwell and Dow Rockwell LLC began
recommending their advisory clients invest in membership interests in various PFI LLCs.
Rockwell and Dow Rockwell LLC solicited their clients by various means, including emails,
telephone calls and in-person meetings.
26. Without doing adequate due diligence into PFI’s financial condition, Rockwell
and Dow Rockwell LLC repeated to prospective investors PFI’s claims that its real estate
offerings presented a safe and secure alternative to the stock market that would achieve high
returns.
27. Pursuant to a verbal agreement with Casey, PFI paid Rockwell a 5% commission
or “referral fee” based on the principal amount invested by investors he introduced to PFI.
28. From September 2017 through May 2020, Rockwell and Dow Rockwell LLC
received approximately $400,000 in “referral fees,” or transaction-based compensation, from PFI
for soliciting and recommending PFI investments to their advisory clients.
29. The referral fees received by Rockwell and Dow Rockwell LLC were higher than
the typical 0.3-0.5% assets-under-management annual advisory fee that Dow Rockwell LLC
received based on recommending other investments to its clients.  This gave Rockwell and Dow
Rockwell LLC an incentive to recommend PFI investments over other investment products.
30. During the relevant period, Rockwell and Dow Rockwell LLC solicited
approximately 21 clients in three states and recommended they invest approximately $8 million
in PFI.  PFI ultimately returned more than $1 million of those funds because they were
investments in an LLC that was raising funds at the time of Casey’s death.  Although, PFI

COMPLAINT
SEC
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ROCKWELL

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returned those funds to investors, Rockwell failed to return the more than $50,000 in referral fees
that he received from PFI for soliciting those funds.
31. Dow Rockwell LLC’s total income from referral fees related to the PFI
investments constituted nearly 40% of its revenue in 2019 and 2020, and more than 25% of its
income for 2018.

D. Dow Rockwell LLC and Rockwell Failed to Disclose Their Referral
Fees and the Associated Conflict of Interest to Clients
32. As investment advisers, Dow Rockwell LLC and Rockwell were obligated to
fully disclose all material facts relating to the advisory relationship, including any actual or
potential conflicts of interest that might incline Dow Rockwell LLC or Rockwell – consciously
or unconsciously – to render investment advice that was not disinterested.  To meet this
obligation, Dow Rockwell LLC and Rockwell were required to provide advisory clients with
sufficient information about compensation received from PFI in connection with their
recommendations concerning PFI securities so that their clients could decide whether to give
informed consent to such conflicts or practices, or choose different investment products.
33. Dow Rockwell LLC and Rockwell did not disclose to clients the five percent
referral fee they received from PFI (which was significantly higher than the typical 0.3-0.5%
advisory fees they charged their clients) or the resulting conflict of interest they had in
recommending PFI investments.
34. Dow Rockwell LLC and Rockwell failed to satisfy the fiduciary duties they owed
to their clients by failing to provide written or verbal disclosures about the conflicts of interest
they had regarding PFI investments. Specifically, Dow Rockwell LLC and Rockwell failed to
inform clients that Dow Rockwell LLC received as much as ten times its typical advisory fee for
the first year of a client’s investment in PFI, and that Dow Rockwell LLC received a material
amount of its compensation related to the sale of PFI securities.

COMPLAINT
SEC
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ROCKWELL

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E. Dow Rockwell LLC and Rockwell Made False Statements and Omissions in
ADV Brochures Filed with the Commission
35. As an investment adviser registered with the Commission, Dow Rockwell LLC is
required to file with the Commission a Form ADV, which includes Parts 1 and 2 (Part 2A is the
“ADV Brochure”).  Rockwell was the sole individual at Dow Rockwell LLC responsible for
drafting, reviewing, editing and approving Dow Rockwell LLC’s Forms ADV Parts 1 and 2,
including the ADV Brochures that were filed with the Commission during the relevant period.
Dow Rockwell LLC and Rockwell also delivered ADV Brochures to their clients.
36. During the relevant period, Item 5 of the ADV Brochure required Dow Rockwell
LLC to disclose how it was compensated for its advisory services, including whether Dow
Rockwell LLC or any of its supervised persons accepted compensation for the sale of securities
or other investment products and, if so, to provide an explanation that this practice constitutes a
conflict of interest.
37. Similarly, Item 14.A of the ADV Brochure required Dow Rockwell LLC to
disclose information about any economic benefit provided by someone who is not a client for
providing investment advice, and generally to describe the arrangement, along with the resulting
conflicts of interest and how the investment adviser will address those conflicts of interest.
38. During the relevant period, Dow Rockwell LLC, through Rockwell, filed four
ADV Brochures that falsely stated the following:
 In response to Item 5.F: “Dow Rockwell does not buy or sell securities and
does not receive compensation for securities transactions in any Client account,
other than the Investment Advisory Fees noted above.”
 In response to Item 14.A: “Dow Rockwell is a fee-only advisor, who, in all
circumstances, is compensated solely by the Client.  Dow Rockwell does not
receive commissions or other compensation from product sponsors, broker
dealers or any unrelated third party.”
39. These representations were false because Dow Rockwell LLC, since at least
September 2017, had been receiving referral fees for each investment in PFI it referred.  Dow
Rockwell LLC received the compensation based on Rockwell’s advice to Dow Rockwell LLC
clients that they invest in and continue holding membership interests in various PFI LLCs.

COMPLAINT
SEC
 V. DOW ROCKWELL LLC AND RICHARD DOW
ROCKWELL

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Moreover, the ADV Brochures failed to disclose the conflicts of interest that Dow Rockwell
LLC had with respect to PFI investments, namely that Dow Rockwell LLC received more than
ten times its typical advisory fee for referring an investment to PFI.
F. Dow Rockwell LLC and Rockwell Did Not Disclose to Clients PFI’s
Founder’s Past Criminal Conviction
40. As investment advisers, for each investment product they recommended, Dow
Rockwell LLC and Rockwell were obligated to fully disclose all key risks of which they were
aware, including risks related to the issuers of the securities they advised their clients to
purchase.  During the relevant period, Rockwell knew that Casey, PFI’s founder, had been
previously convicted in 1997 of various federal felonies, including bank fraud, tax evasion and
filing false income tax returns.  Rockwell also knew that Casey lost his accounting license as a
result of his felony conviction.
41. However, Rockwell did not disclose to his advisory clients during the relevant
period Casey’s criminal history or the loss of his accounting license, despite the fact that
Rockwell knew that Casey continued to exercise complete control over the operations of PFI and
played a central role in raising funds from investors.
42. In or about November 2019, one of Dow Rockwell LLC and Rockwell’s clients
became independently aware of information relating to Casey’s criminal history and informed
Rockwell that he would have considered the information important to his investment decision.
Yet, even after that interaction, Rockwell failed to disclose Casey’s conviction to subsequent
clients to whom he recommended PFI.
43. Dow Rockwell LLC and Rockwell failed to satisfy the fiduciary duties they owed
to their clients by failing to provide adequate written and verbal disclosures about a key risk
related to the PFI securities they recommended to numerous clients.  Specifically, Dow Rockwell
LLC and Rockwell failed to inform clients that 1) Casey had been convicted in federal court of
multiple felonies, and 2) as a result of Casey’s conviction, his accounting license had been
revoked by the California Board of Accountancy.

COMPLAINT
SEC
 V. DOW ROCKWELL LLC AND RICHARD DOW
ROCKWELL

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G. Rockwell and Dow Rockwell LLC Acted as Unregistered Broker-Dealers
and Offered and Sold PFI Securities in Unregistered Securities Transactions
44. Rockwell and Dow Rockwell LLC solicited approximately $8 million in PFI
investments from at least 21 of their clients during the relevant period.  Rockwell met in person
and communicated with clients via telephone and in emails about PFI investments.
45. PFI regularly provided Rockwell and Dow Rockwell LLC with marketing
materials and the necessary offering documents required to solicit clients to invest in PFI.
Rockwell and Dow Rockwell LLC used the materials in soliciting clients to invest, including
attaching them to emails and using the information when Rockwell spoke to prospective
investors.
46. Once a client agreed to invest in PFI, Rockwell assisted with finalizing their
investments, including the preparation of necessary paperwork such as investor forms and
subscription agreements.
47. In exchange for Rockwell and Dow Rockwell LLC soliciting and recommending
investors to purchase PFI securities, PFI compensated Dow Rockwell LLC and Rockwell
directly on transactions in the form of referral fees based on the principal amount invested by
investors they introduced to PFI.
48. During the relevant period, Dow Rockwell LLC was not registered as a broker-
dealer and Rockwell was not associated with a registered broker-dealer.
49. Additionally, the PFI securities Rockwell and Dow Rockwell LLC solicited and
recommended to their clients were not registered with the Commission and there was no
applicable exemption from registration.
FIRST CLAIM FOR RELIEF
Violations of Sections 206(1) and 206(2) of the Advisers Act
50. The Commission re-alleges and incorporates by reference Paragraph Nos. 1
through 49.

COMPLAINT
SEC
 V. DOW ROCKWELL LLC AND RICHARD DOW
ROCKWELL

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51. Dow Rockwell LLC and Rockwell at all relevant times were investment advisers
within the meaning of Section 202(11) of the Advisers Act [15 U.S.C. § 80b-2(11)].  Dow
Rockwell LLC and Rockwell each were in the business of providing investment advice
concerning securities for compensation.  Rockwell was also an investment adviser due to his
ownership, management, and control of Dow Rockwell LLC.
52. As investment advisers, Dow Rockwell LLC and Rockwell owed their advisory
clients fiduciary duties of utmost good faith, loyalty, and care to make full and fair disclosure to
them of all material facts, including any conflicts or potential conflicts of interest, as well as the
duty to act in the best interests of their clients and not to act in their own interests to the detriment
of their clients.
53. During the relevant period, Dow Rockwell LLC and Rockwell, by use of the
mails, and the means and instrumentalities of interstate commerce, directly or indirectly, while
acting as investment advisers, knowingly or recklessly: (1) employed devices, schemes, or
artifices to defraud clients or prospective clients; or (2) engaged in transactions, practices, and
courses of business that operated as a fraud or deceit upon clients or prospective clients.
54. By reason of the foregoing, Dow Rockwell LLC and Rockwell breached their
fiduciary duties to their clients and have otherwise violated, and unless enjoined will again
violate, Sections 206(1) and 206(2) of the Advisers Act [15 U.S.C. §§ 80b-6(1) and (2)].
SECOND CLAIM FOR RELIEF
Violations of Section 207 of the Advisers Act
55. The Commission re-alleges and incorporates by reference Paragraph Nos. 1
through 49.
56. Section 207 of the Advisers Act [15 U.S.C. § 80b-7] provides that it is unlawful
for any person willfully to make any untrue statement of a material fact in any registration
application or report filed with the SEC under Section 203 of the Advisers Act [15 U.S.C. § 80b-
3], or to omit to state in any such application or report any material fact which is required to be
stated therein.  Rule 204-1 [17 C.F.R. § 275.204-1] promulgated under Section 204 of the

COMPLAINT
SEC
 V. DOW ROCKWELL LLC AND RICHARD DOW
ROCKWELL

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Advisers Act [15 U.S.C. § 80b-4] states that each amendment to the Form ADV is a “report”
within the meaning of Section 207 of the Advisers Act [15 U.S.C. § 80b-7].
57. During the relevant period, Dow Rockwell LLC and Rockwell, by use of the
mails, and the means and instrumentalities of interstate commerce, directly or indirectly, while
acting as investment advisers, willfully:  (1) made untrue statements of material fact in
registration applications and reports filed with the Commission; or (2) omitted to state in
registration applications and reports filed with the Commission material facts which are required
to be stated therein.
58. By reason of the foregoing, Dow Rockwell LLC and Rockwell violated, and
unless enjoined will again violate, Section 207 of the Advisers Act [15 U.S.C. § 80b-7].
THIRD CLAIM FOR RELIEF
Violations of Section 5(a) and 5(c) of the Securities Act
59. The Commission re-alleges and incorporates by reference Paragraph Nos. 1
through 49.
60. No registration statement was filed with the Commission or otherwise in effect
with respect to the securities Dow Rockwell LLC and Rockwell offered and sold as described in
this Complaint and no exemption from registration existed with respect to these securities.
61. During the relevant period, Dow Rockwell LLC and Rockwell offered to sell,
sold and delivered after sale, the securities described in this Complaint, and directly and
indirectly:
a) made use of any means or instruments of transportation or
communication in interstate commerce or of the mails to sell such
securities, through the use or medium of a prospectus or otherwise;

b) carried or caused to be carried through the mails or in interstate
commerce, by any means or instruments of transportation, such
securities for the purpose of sale or delivery after sale; or

c) made use of any means or instruments of transportation or
communication in interstate commerce or of the mails to offer to sell or
offer to buy through the use or medium of any prospectus or otherwise
such securities.

COMPLAINT
SEC
 V. DOW ROCKWELL LLC AND RICHARD DOW
ROCKWELL

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62. By reason of the foregoing, Dow Rockwell LLC and Rockwell violated, and
unless enjoined will again violate, Sections 5(a) and 5(c) of the Securities Act [15 U.S.C. §§
77e(a) and 77e(c)].
FOURTH CLAIM FOR RELIEF
Violations of Section 15(a)(1) of the Exchange Act
63. The Commission re-alleges and incorporates by reference Paragraph Nos. 1
through 49.
64. During the relevant period, Dow Rockwell LLC and Rockwell, directly or
indirectly, by the use of the mails or any means or instrumentality of interstate commerce,
effected transactions in, or induced or attempted to induce the purchase or sale of securities,
while they were not registered with the Commission as brokers or dealers or not associated with
an entity registered with the Commission as a broker-dealer.
70. By reason of the foregoing, Dow Rockwell LLC and Rockwell violated, and
unless enjoined will continue to violate, Section 15(a)(1) of the Exchange Act [15 U.S.C. §
78o(a)(1)].
PRAYER FOR RELIEF
WHEREFORE, the Commission respectfully requests that this Court enter a judgment:
I.
Permanently enjoining Defendants Dow Rockwell LLC and Rockwell from directly or
indirectly violating Sections 206(1), 206(2) and 207 of the Advisers Act [15 U.S.C. §§ 80b-
6(1), 80b-6(2) and 80b-7], Sections 5(a) and 5(c) of the Securities Act [15 U.S.C. §§ 77e(a)
and 77e(c)], and Section 15(a)(1) of the Exchange Act [15 U.S.C. § 78o(a)(1)];
II.
Ordering Defendants Dow Rockwell LLC and Rockwell to disgorge all ill-gotten gains
or unjust enrichment derived from the activities set forth in this complaint, together with
prejudgment interest thereon;

COMPLAINT
SEC
 V. DOW ROCKWELL LLC AND RICHARD DOW
ROCKWELL

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III.
Ordering Defendants Dow Rockwell LLC and Rockwell to pay civil monetary penalties
pursuant to Section 20(d) of the Securities Act [15 U.S.C. § 77t(d)], Section 21(d) of the
Exchange Act [15 U.S.C. § 78u(d)(3)] and Section 209 of the Advisers Act [15 U.S.C. § 80b-
9];
IV.
Retaining jurisdiction of this action in accordance with the principles of equity and the
Federal Rules of Civil Procedure in order to implement and carry out the terms of all orders and
decrees that may be entered, or to entertain any suitable application or motion for additional
relief within the jurisdiction of this Court; and
V.
Granting such other and further relief as this Court may determine to be just, equitable
and necessary.

Dated:  March 31, 2022  Respectfully submitted,

/s/            Bernard            B.            Smyth
BERNARD B. SMYTH
Attorney for Plaintiff
SECURITIES AND EXCHANGE COMMISSION

JS-CAND 44 (Rev. 10/2020)
CIVIL COVER SHEET
The JS-CAND 44 civil cover sheet and the information contained herein neither replace nor supplement the filing and service of pleadings or other papers as required by law,
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(Place an “X” in One Box Only) SAN FRANCISCO/OAKLAND SAN JOSE EUREKA-MCKINLEYVILLE
DATE SIGNATURE OF ATTORNEY OF RECORD

ATTACHMENT TO CIVIL COVER SHEET
ATTACHMENT TO CIVIL COVER SHEET
Securities and Exchange Commission, Plaintiff
v.
DOW ROCKWELL LLC and RICHARD
DOW ROCKWELL, Defendants.
I
. (c) Attorneys
Attorneys for Plaintiff
MONIQUE C.  WINKLER (Cal. Bar No. 213031
)
BERNARD B. SMYTH (Cal. Bar No. 217741)
TRACY L. DAVIS (Cal. Bar No. 184129)
SECURITIES AND EXCHANGE COMMISSION
44 Montgomery Street, 28th Floor
San Francisco, California  94104
Phone:  (415) 705-2500
Facsimile:  (415) 705-2501

COMPLAINT  
SEC V. DOW ROCKWELL LLC AND RICHARD DOW 

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MONIQUE C. WINKLER (Cal. Bar No. 213031) 
BERNARD B. SMYTH (Cal. Bar No. 217741) 
  [email protected] 
TRACY L. DAVIS (Cal. Bar No. 184129) 
    [email protected] 
 
Attorneys for Plaintiff 
SECURITIES AND EXCHANGE COMMISSION 
44 Montgomery Street, Suite 2800 
San Francisco, CA 94104 
Telephone: (415) 705-2500 
Facsimile: (415) 705-2501 

SECURITIES AND EXCHANGE COMMISSION, 
 
  Plaintiff, 
 
 v. 
 
DOW ROCKWELL LLC AND RICHARD DOW 
ROCKWELL, 
 

  Defendants. 
 

Case No. 
 
 
COMPLAINT 
 

Plaintiff Securities and Exchange Commission (the “Commission”) alleges: 

SUMMARY OF THE ACTION 

1. From at least September 2017 through May 2020 (the “relevant period”), Dow 

Rockwell LLC and its sole principal Richard Dow Rockwell (“Rockwell”) acted as unregistered 

brokers on behalf of Professional Financial Investors, Inc. (“PFI”), a real estate investment and 

management company in Marin, California.  Through the actions of Rockwell, California-

registered investment adviser Dow Rockwell LLC raised approximately $8 million for PFI from 

UNITED STATES DISTRICT COURT 

NORTHERN DISTRICT OF CALIFORNIA 

SAN FRANCISCO DIVISION 

 

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the offer and sale of securities in unregistered transactions to their advisory clients in California, 

Louisiana and Nevada.  PFI paid Rockwell and Dow Rockwell LLC a five percent commission 

for the investor funds they solicited.  In total, over the relevant period, Rockwell and Dow 

Rockwell LLC earned approximately $400,000 in transaction-based commissions or “referral 

fees” from their sales of PFI securities, which constituted nearly 40% of Dow Rockwell LLC’s 

total revenue in 2019 and 2020, and more than 25% of Dow Rockwell LLC’s revenue in 2018. 

2. Rockwell and Dow Rockwell LLC made false and misleading statements when 

offering the PFI investments to their clients.  For example, Rockwell and Dow Rockwell LLC 

falsely told investors that Dow Rockwell LLC did not receive transaction-based compensation, 

but was rather compensated solely through advisory fees that it charged its clients.  In fact, as 

Rockwell and Dow Rockwell LLC knew, PFI compensated them based on a percentage of the 

price their clients paid to purchase the securities and that these referral fees they earned from PFI 

were substantially higher than the management fees they charged their advisory clients for most 

other investment types.  The failure to disclose this compensation constituted an undisclosed 

conflict of interest because the compensation Rockwell and Dow Rockwell LLC received for 

selling PFI securities incentivized Rockwell and Dow Rockwell LLC to recommend PFI to their 

clients instead of other possible investments.   

3. Over the relevant period, Rockwell and Dow Rockwell LLC also failed to 

disclose to the investors they solicited to purchase PFI securities the past criminal conviction of 

PFI’s founder, who exerted significant control over PFI’s operations until the founder’s death in 

May 2020.  As a result, Rockwell and Dow Rockwell LLC’s clients failed to fully appreciate the 

risks associated with their investments in PFI. 

4. Although PFI marketed its securities to investors as safe alternatives to the stock 

market that were secured by large cash reserves and that would yield regular returns, in reality 

PFI operated as a fraud.  PFI’s now-deceased founder and its president collectively 

misappropriated more than $35 million from PFI’s investors as part of a larger fraudulent scheme 

in which hundreds of millions of dollars were raised from more than 1,300 investors.  

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PFI’s fraudulent scheme began to unravel shortly after the death of its founder on May 6, 2020.  

PFI is currently in Chapter 11 bankruptcy in the Bankruptcy Court for the Northern District of 

California, leaving many of Rockwell and Dow Rockwell LLC’s clients, as well as thousands of 

other investors, with hundreds of millions of dollars in collective losses.  Many of Dow 

Rockwell LLC’s clients invested their retirement savings in PFI. 

5. During the time they offered and sold PFI securities, neither Rockwell nor Dow 

Rockwell LLC was registered as a broker-dealer with the Commission or associated with a 

registered broker-dealer. Additionally, PFI did not register its securities offering with the 

Commission, and there was no applicable exemption from registration for PFI’s securities. 

6. Defendants Rockwell and Dow Rockwell LLC have violated, and unless 

restrained and enjoined will continue to violate, Sections 5(a) and 5(c) of the Securities Act of 

1933 (“Securities Act”) [15 U.S.C. §§ 77e(a) and 77e(c)], Section 15(a)(1) of the Securities 

Exchange Act of 1934 (“Exchange Act”) [15 U.S.C. § 78o(a)(1)] and Sections 206(1), 206(2) 

and 207 of Investment Advisers Act of 1940 (“Advisers Act”) [15 U.S.C. §§ 80b-6(1), 80b-6(2) 

and 80b-7].  The Commission seeks an injunction against Rockwell and Dow Rockwell LLC 

from future violations of these provisions, as well as disgorgement of ill-gotten gains, 

prejudgment interest on disgorgement, and civil money penalties. 

JURISDICTION AND VENUE 

7. The Commission brings this action pursuant to Sections 20(b), 20(d) and 22(a) of 

the Securities Act  [15 U.S.C. §§ 77t(b), 77t(d) and 77v(a)], Sections 21(d), 21(e) and 27 of the 

Exchange Act [15 U.S.C. §§ 78u(d), 78u(e) and 78aa] and Sections 209(d) and 209(e) of the 

Advisers Act [15 U.S.C. §§ 80b-9(d) and 80b-9(e)]. 

8. This Court has jurisdiction over this action pursuant to Sections 20(b), 20(d)(1) 

and 22(a) of the Securities Act [15 U.S.C. §§ 77t(b), 77t(d)(1), and 77v(a)], Sections 21(d), 21(e) 

and 27 of the Exchange Act [15 U.S.C. §§ 78u(d), 78u(e) and 78aa] and Sections 209(d), 209(e) 

and 214 of the Advisers Act [15 U.S.C. §§ 80b-9(d), 80b-9(e) and 80b-14].   

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9. Defendants Rockwell and Dow Rockwell LLC, directly or indirectly, made use 

of the means and instrumentalities of interstate commerce or of the mails in connection with the 

acts, transactions, practices, and courses of business alleged in this complaint. 

10. Venue is proper in this District pursuant to Section 22(a) of the Securities Act 

[15 U.S.C. § 77v(a)], Section 27(a) of the Exchange Act [15 U.S.C. § 78aa(a)] and Section 214 

of the Advisers Act [15 U.S.C. § 80b-14].  Acts, transactions, practices, and courses of business 

that form the basis for the violations alleged in this complaint occurred in this District.  

Defendants met with and solicited prospective investors in this District, and offers and sales of 

securities took place in this District. 

11. Under Civil Local Rule 3-2(d), this civil action should be assigned to the San 

Francisco Division, because a substantial part of the events or omissions which give rise to the 

claims alleged herein occurred in Marin County. 

DEFENDANTS 

12. Dow Rockwell LLC is a California limited liability company formed in 2005, 

with its principal place of business in San Rafael, California.  Dow Rockwell LLC has been 

registered in California as an investment adviser since 2005.  During the relevant period, Dow 

Rockwell LLC served as an investment adviser to approximately 50 individual retail clients and 

had approximately $2-3 million in assets under management.  Dow Rockwell LLC specialized in 

helping its clients prepare for retirement and charged clients annual advisory fees of 0.3-0.5% 

during the relevant period. 

13. Richard Rockwell, age 62, resides in Marin, California.  Since 2005, Rockwell 

has been the principal of Dow Rockwell LLC and has managed and controlled its operations.  He 

was not registered as a broker-dealer or associated with any registered broker-dealer during the 

time he sold PFI’s securities.  Rockwell has held Series 7, 24, 63 and 66 securities licenses.  

Currently, only his Series 7 license remains active.  Rockwell also holds a California insurance 

license. 

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RELATED ENTITY 

14. Professional Financial Investors, Inc. is a California corporation based in 

Novato, California.  PFI is a real estate investment and management firm specializing in multi-

unit residential and commercial real estate in Northern California.  On July 26, 2020, PFI filed a 

voluntary Chapter 11 bankruptcy petition in the Bankruptcy Court for the Northern District of 

California. 

FACTUAL ALLEGATIONS 

A. Background of PFI and the Securities Offered and Sold 

15. PFI was founded in 1990 by Kenneth J. Casey, who died on May 6, 2020.  It was 

founded as a real estate investment and management firm specializing in multi-unit residential 

and commercial properties in Northern California. 

16. Casey served as the sole director, officer and shareholder of PFI until 1998, when 

he relinquished his corporate positions and Lewis Wallach took over as president of PFI.    

Despite relinquishing his corporate positions, Casey continued to exert significant control over 

PFI until his death.  Wallach continued to serve as president of PFI until June 2020, when he was 

forced to resign because of his role in the fraudulent scheme. 

17. Together PFI and its related entities own a direct or indirect interest in 

approximately 70 residential and commercial real properties in California, including equity 

interests in limited liability companies (together, the “LLCs”) that hold either fee title or an 

interest as tenant-in-common in various real properties and general partner interests in limited 

partnerships (together, the “LPs”) that hold fee title to various real properties in California.  

18. Since at least September 2017 through May 2020, at the direction of Casey and 

Wallach, PFI raised funds from investors through the offer and sale of membership interests in 

various LLCs.  Investors were told that the interest payments and equity distributions for all of 

the securities offered and sold by PFI were to be made based on the income generated by PFI’s 

management of the underlying real property, including collection of rents from tenants.  

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B. PFI’s Fraudulent Scheme 

19. From at least June 2011 to May 2020, PFI raised hundreds of millions of dollars 

from more than 1,300 investors through the offer and sale of the securities described above.  A 

significant portion of those investors are elderly and invested IRA or other retirement funds.  

Many investors relied on investment returns to pay their daily living expenses. 

20. While soliciting investments, PFI’s principals made numerous false and 

misleading statements, including falsely telling investors that their monies would be primarily 

used to purchase real property and make improvements to real property already owned by PFI.   

21. Contrary to these representations, a substantial portion of investor funds were 

used in a Ponzi-like fashion to pay back previous investors or to cover operating losses at PFI 

and its related entities.  For example, between September 2015 and May 2020 – a period in 

which PFI and its related entities raised approximately $330 million from investors – over $150 

million was used to pay interest to prior investors, pay certain investors principal and cover the 

operating losses of PFI. 

22. In addition to the Ponzi-like scheme, Casey and Wallach collectively 

misappropriated more than $35 million in investor funds.  Both men treated PFI’s bank accounts 

as their personal funds, accessing them regularly to use investor monies for their own personal 

enrichment, including such expenses as personal tax obligations and renovations of their 

personal residences.   

23. Casey and Wallach also misrepresented the safety and liquidity of the securities 

offered and sold by PFI, falsely telling investors that their investments were liquid and could be 

cashed out at any time, with as little as a few days’ notice, and that PFI maintained substantial 

reserve funds for that purpose.  Contrary to their representations, PFI lacked adequate cash to 

meet their obligations without bringing in new investor funds, let alone cash sufficient to provide 

liquidity to investors seeking to withdraw their investments on short notice. 

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C. Dow Rockwell LLC and Rockwell’s Receipt of Compensation Related to PFI 
Investments 

24. Dow Rockwell LLC has been registered in California as an investment adviser 

since 2005.  It was never registered as a broker-dealer.  Rockwell was associated with various 

registered broker-dealers from 2004 to 2005 and 2006 to 2010, but has not been associated with 

a registered broker-dealer since then.   

25. In approximately September 2017, Rockwell and Dow Rockwell LLC began 

recommending their advisory clients invest in membership interests in various PFI LLCs.  

Rockwell and Dow Rockwell LLC solicited their clients by various means, including emails, 

telephone calls and in-person meetings.   

26. Without doing adequate due diligence into PFI’s financial condition, Rockwell 

and Dow Rockwell LLC repeated to prospective investors PFI’s claims that its real estate 

offerings presented a safe and secure alternative to the stock market that would achieve high 

returns.  

27. Pursuant to a verbal agreement with Casey, PFI paid Rockwell a 5% commission 

or “referral fee” based on the principal amount invested by investors he introduced to PFI.   

28. From September 2017 through May 2020, Rockwell and Dow Rockwell LLC 

received approximately $400,000 in “referral fees,” or transaction-based compensation, from PFI 

for soliciting and recommending PFI investments to their advisory clients. 

29. The referral fees received by Rockwell and Dow Rockwell LLC were higher than 

the typical 0.3-0.5% assets-under-management annual advisory fee that Dow Rockwell LLC 

received based on recommending other investments to its clients.  This gave Rockwell and Dow 

Rockwell LLC an incentive to recommend PFI investments over other investment products. 

30. During the relevant period, Rockwell and Dow Rockwell LLC solicited 

approximately 21 clients in three states and recommended they invest approximately $8 million 

in PFI.  PFI ultimately returned more than $1 million of those funds because they were 

investments in an LLC that was raising funds at the time of Casey’s death.  Although, PFI 

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returned those funds to investors, Rockwell failed to return the more than $50,000 in referral fees 

that he received from PFI for soliciting those funds. 

31. Dow Rockwell LLC’s total income from referral fees related to the PFI 

investments constituted nearly 40% of its revenue in 2019 and 2020, and more than 25% of its 

income for 2018. 
 
D. Dow Rockwell LLC and Rockwell Failed to Disclose Their Referral 

Fees and the Associated Conflict of Interest to Clients  

32. As investment advisers, Dow Rockwell LLC and Rockwell were obligated to 

fully disclose all material facts relating to the advisory relationship, including any actual or 

potential conflicts of interest that might incline Dow Rockwell LLC or Rockwell – consciously 

or unconsciously – to render investment advice that was not disinterested.  To meet this 

obligation, Dow Rockwell LLC and Rockwell were required to provide advisory clients with 

sufficient information about compensation received from PFI in connection with their 

recommendations concerning PFI securities so that their clients could decide whether to give 

informed consent to such conflicts or practices, or choose different investment products.   

33. Dow Rockwell LLC and Rockwell did not disclose to clients the five percent 

referral fee they received from PFI (which was significantly higher than the typical 0.3-0.5% 

advisory fees they charged their clients) or the resulting conflict of interest they had in 

recommending PFI investments.   

34. Dow Rockwell LLC and Rockwell failed to satisfy the fiduciary duties they owed 

to their clients by failing to provide written or verbal disclosures about the conflicts of interest 

they had regarding PFI investments. Specifically, Dow Rockwell LLC and Rockwell failed to 

inform clients that Dow Rockwell LLC received as much as ten times its typical advisory fee for 

the first year of a client’s investment in PFI, and that Dow Rockwell LLC received a material 

amount of its compensation related to the sale of PFI securities. 

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E. Dow Rockwell LLC and Rockwell Made False Statements and Omissions in 
ADV Brochures Filed with the Commission 

35. As an investment adviser registered with the Commission, Dow Rockwell LLC is 

required to file with the Commission a Form ADV, which includes Parts 1 and 2 (Part 2A is the 

“ADV Brochure”).  Rockwell was the sole individual at Dow Rockwell LLC responsible for 

drafting, reviewing, editing and approving Dow Rockwell LLC’s Forms ADV Parts 1 and 2, 

including the ADV Brochures that were filed with the Commission during the relevant period. 

Dow Rockwell LLC and Rockwell also delivered ADV Brochures to their clients. 

36. During the relevant period, Item 5 of the ADV Brochure required Dow Rockwell 

LLC to disclose how it was compensated for its advisory services, including whether Dow 

Rockwell LLC or any of its supervised persons accepted compensation for the sale of securities 

or other investment products and, if so, to provide an explanation that this practice constitutes a 

conflict of interest. 

37. Similarly, Item 14.A of the ADV Brochure required Dow Rockwell LLC to 

disclose information about any economic benefit provided by someone who is not a client for 

providing investment advice, and generally to describe the arrangement, along with the resulting 

conflicts of interest and how the investment adviser will address those conflicts of interest. 

38. During the relevant period, Dow Rockwell LLC, through Rockwell, filed four 

ADV Brochures that falsely stated the following: 

 In response to Item 5.F: “Dow Rockwell does not buy or sell securities and 
does not receive compensation for securities transactions in any Client account, 
other than the Investment Advisory Fees noted above.” 

 In response to Item 14.A: “Dow Rockwell is a fee-only advisor, who, in all 
circumstances, is compensated solely by the Client.  Dow Rockwell does not 
receive commissions or other compensation from product sponsors, broker 
dealers or any unrelated third party.” 

39. These representations were false because Dow Rockwell LLC, since at least 

September 2017, had been receiving referral fees for each investment in PFI it referred.  Dow 

Rockwell LLC received the compensation based on Rockwell’s advice to Dow Rockwell LLC 

clients that they invest in and continue holding membership interests in various PFI LLCs.  

Case 3:22-cv-02069   Document 1   Filed 03/31/22   Page 9 of 15



  

COMPLAINT  
SEC V. DOW ROCKWELL LLC AND RICHARD DOW 

ROCKWELL 
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Moreover, the ADV Brochures failed to disclose the conflicts of interest that Dow Rockwell 

LLC had with respect to PFI investments, namely that Dow Rockwell LLC received more than 

ten times its typical advisory fee for referring an investment to PFI.  

F. Dow Rockwell LLC and Rockwell Did Not Disclose to Clients PFI’s 
Founder’s Past Criminal Conviction 

40. As investment advisers, for each investment product they recommended, Dow 

Rockwell LLC and Rockwell were obligated to fully disclose all key risks of which they were 

aware, including risks related to the issuers of the securities they advised their clients to 

purchase.  During the relevant period, Rockwell knew that Casey, PFI’s founder, had been 

previously convicted in 1997 of various federal felonies, including bank fraud, tax evasion and 

filing false income tax returns.  Rockwell also knew that Casey lost his accounting license as a 

result of his felony conviction.   

41. However, Rockwell did not disclose to his advisory clients during the relevant 

period Casey’s criminal history or the loss of his accounting license, despite the fact that 

Rockwell knew that Casey continued to exercise complete control over the operations of PFI and 

played a central role in raising funds from investors.   

42. In or about November 2019, one of Dow Rockwell LLC and Rockwell’s clients 

became independently aware of information relating to Casey’s criminal history and informed 

Rockwell that he would have considered the information important to his investment decision.  

Yet, even after that interaction, Rockwell failed to disclose Casey’s conviction to subsequent 

clients to whom he recommended PFI. 

43. Dow Rockwell LLC and Rockwell failed to satisfy the fiduciary duties they owed 

to their clients by failing to provide adequate written and verbal disclosures about a key risk 

related to the PFI securities they recommended to numerous clients.  Specifically, Dow Rockwell 

LLC and Rockwell failed to inform clients that 1) Casey had been convicted in federal court of 

multiple felonies, and 2) as a result of Casey’s conviction, his accounting license had been 

revoked by the California Board of Accountancy. 
 

Case 3:22-cv-02069   Document 1   Filed 03/31/22   Page 10 of 15



  

COMPLAINT  
SEC V. DOW ROCKWELL LLC AND RICHARD DOW 

ROCKWELL 
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G. Rockwell and Dow Rockwell LLC Acted as Unregistered Broker-Dealers 
and Offered and Sold PFI Securities in Unregistered Securities Transactions 

44. Rockwell and Dow Rockwell LLC solicited approximately $8 million in PFI 

investments from at least 21 of their clients during the relevant period.  Rockwell met in person 

and communicated with clients via telephone and in emails about PFI investments. 

45. PFI regularly provided Rockwell and Dow Rockwell LLC with marketing 

materials and the necessary offering documents required to solicit clients to invest in PFI.  

Rockwell and Dow Rockwell LLC used the materials in soliciting clients to invest, including 

attaching them to emails and using the information when Rockwell spoke to prospective 

investors. 

46. Once a client agreed to invest in PFI, Rockwell assisted with finalizing their 

investments, including the preparation of necessary paperwork such as investor forms and 

subscription agreements.  

47. In exchange for Rockwell and Dow Rockwell LLC soliciting and recommending 

investors to purchase PFI securities, PFI compensated Dow Rockwell LLC and Rockwell 

directly on transactions in the form of referral fees based on the principal amount invested by 

investors they introduced to PFI. 

48. During the relevant period, Dow Rockwell LLC was not registered as a broker-

dealer and Rockwell was not associated with a registered broker-dealer. 

49. Additionally, the PFI securities Rockwell and Dow Rockwell LLC solicited and 

recommended to their clients were not registered with the Commission and there was no 

applicable exemption from registration. 

FIRST CLAIM FOR RELIEF 

Violations of Sections 206(1) and 206(2) of the Advisers Act 

50. The Commission re-alleges and incorporates by reference Paragraph Nos. 1 

through 49. 

Case 3:22-cv-02069   Document 1   Filed 03/31/22   Page 11 of 15



  

COMPLAINT  
SEC V. DOW ROCKWELL LLC AND RICHARD DOW 

ROCKWELL 
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51. Dow Rockwell LLC and Rockwell at all relevant times were investment advisers 

within the meaning of Section 202(11) of the Advisers Act [15 U.S.C. § 80b-2(11)].  Dow 

Rockwell LLC and Rockwell each were in the business of providing investment advice 

concerning securities for compensation.  Rockwell was also an investment adviser due to his 

ownership, management, and control of Dow Rockwell LLC. 

52. As investment advisers, Dow Rockwell LLC and Rockwell owed their advisory 

clients fiduciary duties of utmost good faith, loyalty, and care to make full and fair disclosure to 

them of all material facts, including any conflicts or potential conflicts of interest, as well as the 

duty to act in the best interests of their clients and not to act in their own interests to the detriment 

of their clients. 

53. During the relevant period, Dow Rockwell LLC and Rockwell, by use of the 

mails, and the means and instrumentalities of interstate commerce, directly or indirectly, while 

acting as investment advisers, knowingly or recklessly: (1) employed devices, schemes, or 

artifices to defraud clients or prospective clients; or (2) engaged in transactions, practices, and 

courses of business that operated as a fraud or deceit upon clients or prospective clients. 

54. By reason of the foregoing, Dow Rockwell LLC and Rockwell breached their 

fiduciary duties to their clients and have otherwise violated, and unless enjoined will again 

violate, Sections 206(1) and 206(2) of the Advisers Act [15 U.S.C. §§ 80b-6(1) and (2)]. 

SECOND CLAIM FOR RELIEF 

Violations of Section 207 of the Advisers Act 

55. The Commission re-alleges and incorporates by reference Paragraph Nos. 1 

through 49. 

56. Section 207 of the Advisers Act [15 U.S.C. § 80b-7] provides that it is unlawful 

for any person willfully to make any untrue statement of a material fact in any registration 

application or report filed with the SEC under Section 203 of the Advisers Act [15 U.S.C. § 80b-

3], or to omit to state in any such application or report any material fact which is required to be 

stated therein.  Rule 204-1 [17 C.F.R. § 275.204-1] promulgated under Section 204 of the 

Case 3:22-cv-02069   Document 1   Filed 03/31/22   Page 12 of 15



  

COMPLAINT  
SEC V. DOW ROCKWELL LLC AND RICHARD DOW 

ROCKWELL 
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Advisers Act [15 U.S.C. § 80b-4] states that each amendment to the Form ADV is a “report” 

within the meaning of Section 207 of the Advisers Act [15 U.S.C. § 80b-7]. 

57. During the relevant period, Dow Rockwell LLC and Rockwell, by use of the 

mails, and the means and instrumentalities of interstate commerce, directly or indirectly, while 

acting as investment advisers, willfully:  (1) made untrue statements of material fact in 

registration applications and reports filed with the Commission; or (2) omitted to state in 

registration applications and reports filed with the Commission material facts which are required 

to be stated therein. 

58. By reason of the foregoing, Dow Rockwell LLC and Rockwell violated, and 

unless enjoined will again violate, Section 207 of the Advisers Act [15 U.S.C. § 80b-7]. 

THIRD CLAIM FOR RELIEF 

Violations of Section 5(a) and 5(c) of the Securities Act 

59. The Commission re-alleges and incorporates by reference Paragraph Nos. 1 

through 49. 

60. No registration statement was filed with the Commission or otherwise in effect 

with respect to the securities Dow Rockwell LLC and Rockwell offered and sold as described in 

this Complaint and no exemption from registration existed with respect to these securities. 

61. During the relevant period, Dow Rockwell LLC and Rockwell offered to sell, 

sold and delivered after sale, the securities described in this Complaint, and directly and 

indirectly: 
a) made use of any means or instruments of transportation or 

communication in interstate commerce or of the mails to sell such 
securities, through the use or medium of a prospectus or otherwise; 
 

b) carried or caused to be carried through the mails or in interstate 
commerce, by any means or instruments of transportation, such 
securities for the purpose of sale or delivery after sale; or 
 

c) made use of any means or instruments of transportation or 
communication in interstate commerce or of the mails to offer to sell or 
offer to buy through the use or medium of any prospectus or otherwise 
such securities. 

Case 3:22-cv-02069   Document 1   Filed 03/31/22   Page 13 of 15



  

COMPLAINT  
SEC V. DOW ROCKWELL LLC AND RICHARD DOW 

ROCKWELL 
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62. By reason of the foregoing, Dow Rockwell LLC and Rockwell violated, and 

unless enjoined will again violate, Sections 5(a) and 5(c) of the Securities Act [15 U.S.C. §§ 

77e(a) and 77e(c)]. 

FOURTH CLAIM FOR RELIEF 

Violations of Section 15(a)(1) of the Exchange Act 

63. The Commission re-alleges and incorporates by reference Paragraph Nos. 1 

through 49. 

64. During the relevant period, Dow Rockwell LLC and Rockwell, directly or 

indirectly, by the use of the mails or any means or instrumentality of interstate commerce, 

effected transactions in, or induced or attempted to induce the purchase or sale of securities, 

while they were not registered with the Commission as brokers or dealers or not associated with 

an entity registered with the Commission as a broker-dealer. 

70. By reason of the foregoing, Dow Rockwell LLC and Rockwell violated, and 

unless enjoined will continue to violate, Section 15(a)(1) of the Exchange Act [15 U.S.C. § 

78o(a)(1)]. 

PRAYER FOR RELIEF 

WHEREFORE, the Commission respectfully requests that this Court enter a judgment: 

I. 

Permanently enjoining Defendants Dow Rockwell LLC and Rockwell from directly or 

indirectly violating Sections 206(1), 206(2) and 207 of the Advisers Act [15 U.S.C. §§ 80b-

6(1), 80b-6(2) and 80b-7], Sections 5(a) and 5(c) of the Securities Act [15 U.S.C. §§ 77e(a) 

and 77e(c)], and Section 15(a)(1) of the Exchange Act [15 U.S.C. § 78o(a)(1)]; 

II. 

Ordering Defendants Dow Rockwell LLC and Rockwell to disgorge all ill-gotten gains 

or unjust enrichment derived from the activities set forth in this complaint, together with 

prejudgment interest thereon; 

Case 3:22-cv-02069   Document 1   Filed 03/31/22   Page 14 of 15



  

COMPLAINT  
SEC V. DOW ROCKWELL LLC AND RICHARD DOW 

ROCKWELL 
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III. 

Ordering Defendants Dow Rockwell LLC and Rockwell to pay civil monetary penalties 

pursuant to Section 20(d) of the Securities Act [15 U.S.C. § 77t(d)], Section 21(d) of the 

Exchange Act [15 U.S.C. § 78u(d)(3)] and Section 209 of the Advisers Act [15 U.S.C. § 80b-

9]; 

IV. 

Retaining jurisdiction of this action in accordance with the principles of equity and the 

Federal Rules of Civil Procedure in order to implement and carry out the terms of all orders and 

decrees that may be entered, or to entertain any suitable application or motion for additional 

relief within the jurisdiction of this Court; and 

V. 

Granting such other and further relief as this Court may determine to be just, equitable 

and necessary. 

 

 

Dated: March 31, 2022  Respectfully submitted, 

 

/s/ Bernard B. Smyth     
BERNARD B. SMYTH 
Attorney for Plaintiff 
SECURITIES AND EXCHANGE COMMISSION 

Case 3:22-cv-02069   Document 1   Filed 03/31/22   Page 15 of 15



 

      
        

 

 

    

  
  

  

    

    
 

    
 

      
 

 
 

   
 

 
 

     

     

 

 

 

 

 

 
   

 
 

   

  

 

  

 

 

  

 

  

 

  

 

  

   

 

 

  

 

 

 

 

 

  
 

 

  

  

  
 

 

  

 
 

 

 

 

 

  
 

 

 

 

  

 

 

 

  
  

 

  

 

  

 

 

 

  

   

 

 

 
 

 

  

  

 

      
  

  
 

 

 
 

 

   

 

  
 

 

 

 

  
 

  

  

 

 

 

 

   

 
      

 
     

  
    

 

 

 

 

  
  

 
  

 
   

 

 

  

JS-CAND 44 (Rev. 10/2020) CIVIL COVER SHEET 
The JS-CAND 44 civil cover sheet and the information contained herein neither replace nor supplement the filing and service of pleadings or other papers as required by law, 
except as provided by local rules of court. This form, approved in its original form by the Judicial Conference of the United States in September 1974, is required for the Clerk of 
Court to initiate the civil docket sheet. (SEE INSTRUCTIONS ON NEXT PAGE OF THIS FORM.) 

I. (a) PLAINTIFFS 

(b) County of Residence of First Listed Plaintiff
 (EXCEPT IN U.S. PLAINTIFF CASES) 

(c) Attorneys (Firm Name, Address, and Telephone Number) 

DEFENDANTS 

County of Residence of First Listed Defendant 
(IN U.S. PLAINTIFF CASES ONLY) 

NOTE:      IN LAND CONDEMNATION CASES, USE THE LOCATION OF
THE TRACT OF LAND INVOLVED. 

Attorneys (If Known) 

II. BASIS OF JURISDICTION (Place an “X” in One Box Only) 

1 U.S. Government Plaintiff 3 Federal Question 
(U.S. Government Not a Party) 

2 U.S. Government Defendant 4 Diversity
(Indicate Citizenship of Parties in Item III)

III. CITIZENSHIP OF PRINCIPAL PARTIES (Place an “X” in One Box for Plaintiff 
 (For Diversity Cases Only)  and One Box for Defendant) 

PTF DEF PTF DEF 
Citizen of This State 1 1 Incorporated or Principal Place 4 4 

of Business In This State 
Citizen of Another State 2 2 Incorporated and Principal Place 5 5 

of Business In Another State 
Citizen or Subject of a 3 3 Foreign Nation 6 6 
Foreign Country 

IV. NATURE OF SUIT (Place an “X” in One Box Only) 

CONTRACT TORTS FORFEITURE/PENALTY BANKRUPTCY OTHER STATUTES 

110 Insurance 

120 Marine 

130 Miller Act 

140 Negotiable Instrument 

150 Recovery of 
Overpayment Of 
Veteran’s Benefits 

151 Medicare Act 

152 Recovery of Defaulted 
Student Loans (Excludes 
Veterans) 

153 Recovery of 
Overpayment 

of Veteran’s Benefits 

160 Stockholders’ Suits 

190 Other Contract 

195 Contract Product Liability 

196 Franchise 

PERSONAL INJURY 

310 Airplane 

315 Airplane Product Liability 

320 Assault, Libel & Slander 

330 Federal Employers’ 
Liability 

340 Marine 

345 Marine Product Liability 

350 Motor Vehicle 

355 Motor Vehicle Product 
Liability 

360 Other Personal Injury 

362 Personal Injury -Medical 
Malpractice 

PERSONAL INJURY 

365 Personal Injury – Product 
Liability 

367 Health Care/ 
Pharmaceutical Personal 
Injury Product Liability 

368 Asbestos Personal Injury 
Product Liability 

PERSONAL PROPERTY 

370 Other Fraud 

371 Truth in Lending 

380 Other Personal Property 
Damage 

385 Property Damage Product 
Liability 

625 Drug Related Seizure of 
Property 21 USC § 881 

690 Other 

422 Appeal 28 USC § 158 

423 Withdrawal 28 USC 
§ 157 

375 False Claims Act 

376 Qui Tam (31 USC 
§ 3729(a)) 

400 State Reapportionment 

410 Antitrust 

430 Banks and Banking 

450 Commerce 

460 Deportation 

470 Racketeer Influenced & 
Corrupt Organizations 

480 Consumer Credit 

485 Telephone Consumer 
Protection Act 

490 Cable/Sat TV 

850 Securities/Commodities/ 
Exchange 

890 Other Statutory Actions 

891 Agricultural Acts 

893 Environmental Matters 

895 Freedom of Information 
Act 

896 Arbitration 

899 Administrative Procedure 
Act/Review or Appeal of 
Agency Decision 

950 Constitutionality of State 
Statutes 

LABOR PROPERTY RIGHTS 

710 Fair Labor Standards Act 

720 Labor/Management 
Relations 

740 Railway Labor Act 

751 Family and Medical 
Leave Act 

790 Other Labor Litigation 

791 Employee Retirement 
Income Security Act 

820 Copyrights 

830 Patent 

835 Patent─Abbreviated New 
Drug Application 

840 Trademark 
880 Defend Trade Secrets

  Act of 2016 

SOCIAL SECURITY 

861 HIA (1395ff) 

862 Black Lung (923) 

863 DIWC/DIWW (405(g)) 

864 SSID Title XVI 

865 RSI (405(g)) 

IMMIGRATION 

462 Naturalization 
Application 

465 Other Immigration 
Actions 

CIVIL RIGHTS PRISONER PETITIONS 

440 Other Civil Rights 

441 Voting 

442 Employment 

443 Housing/ 
Accommodations 

445 Amer. w/Disabilities– 
Employment 

446 Amer. w/Disabilities–Other 

448 Education 

HABEAS CORPUS 

463 Alien Detainee 

510 Motions to Vacate 
Sentence 

530 General 

535 Death Penalty 

OTHER 

540 Mandamus & Other 

550 Civil Rights 

555 Prison Condition 

560 Civil Detainee– 
Conditions of 
Confinement 

REAL PROPERTY FEDERAL TAX SUITS 

210 Land Condemnation 

220 Foreclosure 

230 Rent Lease & Ejectment 

240 Torts to Land 

245 Tort Product Liability 

290 All Other Real Property 

870 Taxes (U.S. Plaintiff or 
Defendant) 

871 IRS–Third Party 26 USC 
§ 7609 

V. ORIGIN (Place an “X” in One Box Only) 
1 Original 2 Removed from 3 Remanded from 4 Reinstated or 5 Transferred from 6 Multidistrict 8 Multidistrict 

Proceeding State Court Appellate Court Reopened Another District (specify) Litigation–Transfer Litigation–Direct File 

Cite the U.S. Civil Statute under which you are filing  (Do not cite jurisdictional statutes unless diversity):VI. CAUSE OF 
ACTION 

Brief description of cause: 

CHECK IF THIS IS A CLASS ACTION DEMAND $ CHECK YES only if demanded in complaint: 
UNDER RULE 23, Fed. R. Civ. P. JURY DEMAND: 

VII. REQUESTED IN 
Yes NoCOMPLAINT: 

VIII. RELATED CASE(S), JUDGE DOCKET NUMBER 
IF ANY (See instructions): 

IX. DIVISIONAL ASSIGNMENT (Civil Local Rule 3-2) 
(Place an “X” in One Box Only) SAN FRANCISCO/OAKLAND SAN JOSE EUREKA-MCKINLEYVILLE 

DATE SIGNATURE OF ATTORNEY OF RECORD 

Case 3:22-cv-02069   Document 1-1   Filed 03/31/22   Page 1 of 2



ATTACHMENT TO CIVIL COVER SHEET 

ATTACHMENT TO CIVIL COVER SHEET 

Securities and Exchange Commission, Plaintiff 

v.  

DOW ROCKWELL LLC and RICHARD 

DOW ROCKWELL, Defendants. 

I. (c) Attorneys

Attorneys for Plaintiff 

MONIQUE C. WINKLER (Cal. Bar No. 213031) 
BERNARD B. SMYTH (Cal. Bar No. 217741)         
TRACY L. DAVIS (Cal. Bar No. 184129)            

SECURITIES AND EXCHANGE COMMISSION 
44 Montgomery Street, 28th Floor 
San Francisco, California  94104 
Phone:  (415) 705-2500 
Facsimile:  (415) 705-2501

Case 3:22-cv-02069   Document 1-1   Filed 03/31/22   Page 2 of 2


	Plaintiff: SECURITIES AND EXCHANGE COMMISSION
	Defendant: DOW ROCKWEL LLC AND RICHARD DOW ROCKWELL
	County_of_Residence_P1: 
	County_of_Residence_of_D1: MARIN
	Plaintiff's Attorney(s): See Attachment
	Defendant's Attorney(s) (If Known): Edward Zusman, Esq.
Markun Zusman Freniere Compton LLP
465 California Street, Suite 401, San Francisco, California 94104  415.438.4515
	7: Off
	8: Off
	9: Off
	10: Off
	Basis of Jurisdiction: 1.U.S. Plaintiff
	11: Off
	12: Off
	13: Off
	14: Off
	15: Off
	16: Off
	17: Off
	18: Off
	Nature of Suit: 850
	V: 
	Origin: 1

	CauseofAction: 15 U.S.C. §§ 77t(b), 77t(d), and 77v(a) AND 15 U.S.C. §§ 78u(d), 78u(e), and 78aa
	Brief Description: SECURITIES FRAUD
	Class Action: Off
	Demand: 
	CHECK_YES_only_if_demand1: No
	Related Case Judge: CHESNEY
	Related Case Docket Numbers: 20-cv-06756-MMC; 21-cv-04164-MMC 
	SF/Oak: 465
	San Jose: Off
	Eureka: Off
	Today's Date: 3/31/2022
	Signature of Attorney of Record: /s/ Bernard B. Smyth
	Button: 
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