SEC v. Arete Wealth Management, LLC; Arete Wealth Advisors, LLC; Joey Dale Miller; Jeffrey Scott Larson; Randall Scott Larson; and UnBo Chung, No. 1:25-cv-00616, Eastern District of New York (Jan. 17, 2025) — Complaint

UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION

SECURITIES AND EXCHANGE
COMMISSION,
                    Plaintiff,
     v.

ARETE WEALTH MANAGEMENT, LLC,
ARETE WEALTH ADVISORS, LLC,
JOEY DALE MILLER,
JEFFREY SCOTT LARSON,
RANDALL SCOTT LARSON, and
UNBO CHUNG,

                    Defendants.

Civil Action No. ___________

Jury Trial Demanded

COMPLAINT
     Plaintiff Securities and Exchange Commission (“Commission”), for its Complaint against
Defendants Arete Wealth Management, LLC (“Arete Wealth”), Arete Wealth Advisors, LLC
(“Arete Advisors”), Joey Dale Miller (“Miller”), Jeffrey Scott Larson (“Jeff Larson”), Randall
Scott Larson (“Randy Larson”), and UnBo (“Bob”) Chung (“Chung”) (collectively,
“Defendants”), alleges as follows:
SUMMARY
1. From approximately October 2018 to May 2020 (the “Relevant Period”),
Defendants Miller and brothers Jeff Larson and Randy Larson (together, the “Arete
Representatives”)—licensed sales representatives at Defendant Arete Wealth, a Commission-
registered broker-dealer, and investment adviser representatives at Defendant Arete Advisors, a
Commission-registered investment adviser (together with Arete Wealth, “Arete”)—solicited
dozens of their customers and clients to purchase stock in Zona Energy, Inc. (“Zona”) without

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receiving Arete’s approval and therefore not subject to its compliance oversight, a prohibited
practice called “selling away.” In the process, Miller and Jeff Larson defrauded investors. Later,
they, along with Randy Larson and Chung—Arete’s general counsel and chief compliance
officer (“CCO”) —obtained liability waivers, which they knew contained material
misrepresentations and omissions, from their advisory clients, to whom they owed a fiduciary
duty. This misconduct occurred while Arete engaged in long-running violations of record-
keeping provisions—through the Arete Representatives and others—and violations of
compliance provisions—through Chung—of the federal securities laws.
2. In approximately late 2018 through early 2019, Miller and Jeff Larson agreed
with Zona’s control person, Richard Dale Sterritt, Jr. a/k/a Richard Richman (“Sterritt”), to raise
money for Zona from investors in exchange for (at least) discounted shares of Zona, and Randy
Larson joined the effort.
3. Miller and Jeff Larson did not disclose this agreement to their customers and
clients—despite owing a fiduciary duty to their advisory clients—and in some cases misled them
into thinking Miller and Jeff Larson were recommending the stock without receiving anything
in return.
4. To try to conceal their conduct, Miller and Jeff Larson directed their customers
and clients not to email them on their Arete email accounts, and they and Randy Larson emailed
Arete customers and clients about Zona from non-Arete email accounts.
5. In January 2020, the Arete Representatives and Chung received an anonymous
email alleging that Richard “Richman” was in fact Richard Sterritt, a convicted felon who had
served several years in prison for conspiracy to commit securities fraud and other crimes.

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6. Yet between February and May 2020, some of the Arete Representatives’
customers and clients who had previously invested in Zona invested additional funds in Zona,
and the Arete Representatives at least assisted certain of these investors in doing so.
7. By May 2020, the Arete Representatives’ brokerage customers and advisory
clients, along with other investors the Arete Representatives solicited, had invested more than
$8.5 million in Zona—over half the total amount Zona raised from investors.
8.  In April 2021, the U.S. Attorney’s Office for the Eastern District of New York
and the Commission respectively filed criminal and civil charges against Sterritt and others
alleging that Zona was a sham company and that Sterritt and other Zona insiders had
misappropriated investor funds for luxury expenses. The Commission’s complaint also alleged
that three representatives of a brokerage and investment advisory firm had agreed to raise funds
for Zona in return for discounted shares of Zona stock.
9. The same day these charges were filed, the Financial Industry Regulatory
Authority (“FINRA”), a self-regulatory organization overseeing brokerage firms such as Arete
Wealth, sent Chung an email requesting information on whether individuals at Arete had raised
funds for Zona and specifically named Jeff Larson, Randy Larson, and Miller.
10. By the end of the month, Arete had identified approximately 120 of its customers
or clients who had invested in Zona, of which approximately 60 were Miller’s, approximately 40
were Jeff Larson’s, and approximately 20 were Randy Larson’s.
11. To try to limit Arete’s liability, Arete’s chief executive officer (“CEO”)
demanded that the Arete Representatives obtain liability releases from their customers and
clients who had invested in Zona and delegated oversight of this process to Chung, who worked
with the Arete Representatives’ counsel.

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12. Chung played an active role in this process and, although Arete Advisors and the
Arete Representatives continued to owe fiduciary duties to their advisory clients, helped the
Arete Representatives obtain broad liability releases from many of their customers and clients in
return for payments typically ranging from $1 to $5,000—much less than most of these investors
had invested in Zona.
13. As Chung and the Arete Representatives knew (or at least recklessly or
negligently disregarded), the releases falsely claimed that the investors understood that the Arete
Representatives had not recommended investments in Zona and that the Arete Representatives
were not acting as financial advisers when doing so. While the releases disclosed that Miller and
Jeff Larson had purchased Zona shares at a discount, the releases misleadingly failed to disclose
that Miller and Jeff Larson had received these shares in return for raising millions of dollars
for Zona.
14. The Arete Representatives’ misconduct occurred while Arete Advisors failed to
comply with important compliance requirements and Arete Wealth failed to comply with key
recordkeeping requirements. Arete Advisors, through Chung, failed to maintain adequate
compliance policies and procedures and failed to conduct required annual reviews of the firm’s
compliance policies for almost four years after Commission staff had warned Chung of these
deficiencies in the firm’s compliance program. And many employees of Arete Wealth, including
its CEO and the Arete Representatives, used their personal phones to communicate about firm
business without retaining these messages in violation of recordkeeping provisions of the federal
securities laws.
15. Meanwhile, the Arete Representatives’ customers and clients and other investors
the Arete Representatives solicited lost nearly all of the money they invested in Zona.

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VIOLATIONS
16. By virtue of the foregoing conduct and as alleged further herein:
(a) Arete Advisors violated Sections 206(1), 206(2), and 206(4) of the Investment
Advisers Act of 1940 (“Advisers Act”) [15 U.S.C. §§ 80b-6(1), 80b-6(2) and
80b-6(4)] and Rule 206(4)-7 thereunder [17 C.F.R. § 275.206(4)-7)];
(b) Arete Wealth violated Section 17(a) of the Securities Exchange Act of 1934
(“Exchange Act”) [15 U.S.C. § 78q(a)] and Rule 17a-4(b)(4) thereunder [17
C.F.R. § 240.17a-4(b)(4)];
(c) Miller violated Exchange Act Sections 15(a) and 10(b) [15 U.S.C §§ 78o(a)
and 78j(b)] and Rule 10b-5 thereunder [17 C.F.R. § 275.10b-5]; violated
Section 17(a) of the Securities Act of 1933 (“Securities Act”) [15 U.S.C.
§ 77q(a)]; violated Advisers Act Sections 206(1) and 206(2) [15 U.S.C.
§§ 80b-6(1) and 80b-6(2)], or, in the alternative, aided and abetted Arete
Advisors’ violations of Advisers Act Sections 206(1) and 206(2) [15 U.S.C.
§§ 80b-6(1) and 80b-6(2)]; and aided and abetted Arete Wealth’s violations of
Exchange Act Section 17(a) [15 U.S.C. § 78q(a)] and Rule 17a-4 thereunder
[17 C.F.R. § 240.17a-4];
(d) Jeff Larson violated Exchange Act Sections 15(a) and 10(b) [15 U.S.C
§§ 78o(a) and 78j(b)] and Rule 10b-5 thereunder [17 C.F.R. § 275.10b-5];
violated Section 17(a) of the Securities Act of 1933 (“Securities Act”) [15
U.S.C. § 77q(a)]; violated Advisers Act Sections 206(1) and 206(2) [15
U.S.C. §§ 80b-6(1) and 80b-6(2)] or, in the alternative, aided and abetted
Arete Advisors’ violations of Advisers Act Sections 206(1) and 206(2) [15
U.S.C. §§ 80b-6(1) and 80b-6(2)]; and aided and abetted Arete Wealth’s

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violations of Exchange Act Section 17(a) [15 U.S.C. § 78q(a)] and Rule 17a-4
thereunder [17 C.F.R. § 240.17a-4];
(e) Randy Larson violated Exchange Act Section 15(a) [15 U.S.C. § 78o(a)];
violated Advisers Act Sections 206(1) and 206(2) [15 U.S.C. §§ 80b-6(1) and
80b-6(2)] or, in the alternative, aided and abetted Arete Advisors’ violations
of Advisers Act Sections 206(1) and 206(2) [15 U.S.C. §§ 80b-6(1) and
80b-6(2)]; and aided and abetted Arete Wealth’s violations of Exchange Act
Section 17(a) [15 U.S.C. § 78q(a)] and Rule 17a-4 thereunder [17 C.F.R.
§ 240.17a-4];
(f) Bob Chung aided and abetted Arete Advisors’, Miller’s, Jeff Larson’s, and/or
Randy Larson’s violations of Advisers Act Sections 206(1) and 206(2) [15
U.S.C. §§ 80b-6(1) and 80b-6(2)] and aided and abetted Arete Advisors’
violations of Advisers Act Section 206(4) [15 U.S.C. § 80b-6(4)] and Rule
206(4)-7 thereunder [17 C.F.R. § 275.206(4)-7)].
17. Unless Defendants are restrained and enjoined, they will engage in the acts,
practices, transactions, and courses of business set forth in this Complaint or in acts, practices,
transactions, and courses of business of similar type and object.
NATURE OF THE PROCEEDINGS AND RELIEF SOUGHT
18. The Commission brings this action pursuant to the authority conferred upon it by
Securities Act Sections 20(b) and 20(d) [15 U.S.C. §§ 77t(b) and 77t(d)], Exchange Act Section
21(d) [15 U.S.C. § 78u(d)], and Advisers Act Sections 209(d) and 209(e) [15 U.S.C. §§ 80b-9(d)
and 80b-9(e)].
19. The Commission seeks a final judgment: (a) permanently enjoining Defendants
from violating the federal securities laws and rules this Complaint alleges they have violated;

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(b) permanently prohibiting Miller, Jeff Larson, and Randy Larson from, directly or indirectly,
acting as or being associated with any broker, dealer, or investment adviser, pursuant to
Exchange Act Section 21(d)(5) [15 U.S.C. §78u(d)(5)]. This injunction shall not prevent the
Arete Representatives from being a customer or client of a broker, dealer, or investment
adviser. For purposes of this requested injunction, (i) a person is associated with a broker or
dealer if such person is a partner, officer, director, or branch manager of such broker or dealer (or
occupies a similar status or performs similar functions), directly or indirectly controls, is
controlled by, or is under common control with such broker or dealer, or is an employee of such
broker or dealer; and (ii) a person is associated with an investment adviser if such person is a
partner, officer, or director of such investment adviser (or performs similar functions), or directly
or indirectly controls or is controlled by such investment adviser, including any employee of
such investment adviser; (c) permanently prohibiting Miller, Jeff Larson, and Randy Larson from
participating in any offering of a penny stock, including engaging in activities with a broker,
dealer, or issuer for purposes of issuing, trading, or inducing or attempting to induce the purchase
or sale of any penny stock, under Exchange Act Section 21(d)(6) [15 U.S.C. § 78u(d)(6)];
(d) permanently prohibiting Miller and Jeff Larson from serving as an officer or director of any
company that has a class of securities registered under Exchange Act Section 12 [15 U.S.C. §
78l] or that is required to file reports under Exchange Act Section 15(d) [15 U.S.C. § 78o(d)],
pursuant to Securities Act Section 20(e) [15 U.S.C. § 77t(e)] and Exchange Act Section 21(d)(2)
[15 U.S.C. § 78u(d)(2)]; (e) permanently prohibiting Randy Larson from serving as an officer or
director of any company that has a class of securities registered under Exchange Act Section 12
[15 U.S.C. § 78l] or that is required to file reports under Exchange Act Section 15(d) [15 U.S.C.
§ 78o(d)], pursuant to Exchange Act Section 21(d)(5) [15 U.S.C. § 78u(d)(5)]; (f) Ordering
Defendants to pay civil money penalties under Securities Act Section 20(d) [15 U.S.C. § 77t(d)],

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Exchange Act Section 21(d) [15 U.S.C. § 78u(d)(3)], and Advisers Act Section 209(e) [15
U.S.C. § 80b-9(e)]; and (g) ordering any other and further relief the Court may deem just
and appropriate.
JURISDICTION AND VENUE
20. This Court has jurisdiction over this action pursuant to Securities Act Section
22(a) [15 U.S.C. § 77v(a)], Exchange Act Section 27 [15 U.S.C. § 78aa], and Advisers Act
Section 214 [15 U.S.C. § 80b-14].
21. Defendants have, directly or indirectly, made use of the means or
instrumentalities of interstate commerce or of the mails, in connection with the transactions, acts,
practice, and courses of business alleged in this Complaint.
22. Venue lies in this Court pursuant to Section 22(a) [15 U.S.C. § 77v(a)], Exchange
Act Section 27 [15 U.S.C. § 78aa], and Advisers Act Section 214 [15 U.S.C. § 80b-1]. Certain of
the acts, practices, transactions and courses of business alleged in this Complaint occurred within
the Northern District of Illinois, where Defendant Chung resides and where Defendants Arete
Wealth and Arete Advisers had its principal offices during the Relevant Period.
DEFENDANTS
23. Arete Wealth is a Connecticut limited liability company (“LLC”) with its
principal office in Chicago, Illinois. It has been registered with the Commission as a
broker-dealer since August 1998. In 2000, Arete Wealth was the subject of regulatory sanctions
by the National Association for Securities Dealers (“NASD”), a self-regulatory organization, for
alleged violations of NASD Rules 1018, 2210, and 3110 related to firm commitment
underwriting. In 2012, the firm was the subject of FINRA sanctions for its alleged violations of
FINRA Rule 2010 and NASD Conduct Rule 3010 based on its failure to enforce its written
supervisory procedures regarding due diligence for private offerings.

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24. Arete Advisors is a Nevada LLC with its principal office in Chicago, Illinois. It
has been registered with the Commission as an investment adviser since January 2009.
According to Arete Advisors’ Form ADV filed on August 15, 2024, it has approximately
$2.67 billion in regulatory assets under management.
25. Joey Miller, age 47, resides in New Braunfels, Texas. Miller is currently a
registered representative of a broker-dealer and an investment adviser representative of an
investment adviser affiliated with the same broker-dealer. From 2014 until October 2023, Miller
was a registered representative of Arete Wealth and an investment adviser representative of
Arete Advisors. Miller is the founder and principal of a private wealth management firm that
formerly operated as a branch office of Arete and is now associated with the broker-dealer and
investment adviser firm he is currently associated with. Miller holds Series 22, 63, 65, and
Securities Industry Essentials (“SIE”) securities licenses.
26. Jeff Larson, age 41, resides in Fenton, Missouri. Jeff Larson is currently an
investment adviser representative, managing partner, and co-founder (with Randy Larson) of a
private wealth management firm (the “Wealth Management Firm”) that formerly operated as a
branch office of Arete. The Wealth Management Firm has been registered with the Commission
as an investment adviser since February 11, 2022, which offers securities through a broker-
dealer. From August 2017 through October 2023, Larson was a registered representative of Arete
Wealth and an investment adviser representative of Arete Advisors. Jeff Larson holds Series 7,
66, and SIE securities licenses.
27. Randy Larson, age 43, resides in St. Louis, Missouri and is Jeff Larson’s brother.
Randy Larson co-founded the Wealth Management Firm he and Jeff Larson are associated with,
is an investment adviser representative of the Wealth Management Firm, and is a registered
representative with the Wealth Management Firm’s broker-dealer. From 2017 through October

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2023, Randy was a registered representative of Arete Wealth and an investment adviser
representative of Arete Advisors. He holds Series 7, 66 and SIE securities licenses. Randy
Larson is also an attorney and a member of the Missouri state bar.
28. Chung, age 53, resides in Chicago, Illinois. Chung has been Arete Wealth’s and
Arete Advisors’ CCO and general counsel since at least 2014. He also supervised the Arete
Representatives. Before joining Arete, Chung was a senior regional counsel for FINRA for
nearly a decade. He holds Series 7, 14, 24, and 66 securities licenses. Chung is registered as an
attorney with the Illinois Attorney Registration & Disciplinary Commission.
OTHER RELEVANT INDIVIDUALS AND ENTITIES
29. Zona was a privately held Texas corporation with its principal place of business
in Dallas, Texas. In marketing materials, Zona described its business as “focused on the
acquisition, development, exploration and exploitation of unconventional, onshore oil and
natural gas reserves in the Permian Basin in West Texas.” Zona was not registered with the
Commission. Zona never registered any offering of its securities under the Securities Act or any
class of its securities under the Exchange Act. Zona’s equity security was a penny stock, as
defined in Section 3(a)(51) of the Exchange Act and Rule 3a51-1 thereunder. On June 29, 2020,
Zona Resources, Inc., a wholly-owned subsidiary of ERF Wireless, Inc. (“ERF”)—which at the
time was a publicly-traded company whose common stock was quoted on OTC Link, an
electronic inter-dealer quotation system—announced that it had completed a share exchange with
Zona, whereby Zona shareholders received shares of ERF. The Zona shares that investors
purchased through the Arete Representatives were held by a transfer agent prior to the
share exchange.
30. Sterritt, age 68, is currently incarcerated at the Metropolitan Detention Center
Brooklyn. In April 2003, Sterritt pleaded guilty to an indictment charging him with conspiracy to

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commit securities fraud, money laundering, and filing false income tax returns. He was
sentenced to five years’ imprisonment. On April 14, 2021, in connection with his conduct in
fraudulently operating Zona and offering its shares, Sterritt was charged in the U.S. District
Court for the Eastern District of New York (“Eastern District of New York”) with conspiracy to
commit securities and wire fraud, multiple counts of securities fraud, and conspiracy to commit
money laundering. On the same day, the Commission filed a complaint in the same federal
district court charging Sterritt with violations of Sections 5(a), 5(c), and 17(a) of the Securities
Act, Sections 9(a), 15(a), and 10(b) of the Exchange Act, and Rule 10b-5 under the Exchange
Act. On November 27, 2023, Sterritt pleaded guilty in the criminal proceeding to conspiracy to
commit securities and wire fraud, multiple counts of securities fraud, and conspiracy to commit
money laundering. Sterritt has not yet been sentenced for these crimes.
31. Katie Mathews (“Mathews”), age 61, resides in Tucson, Arizona. She was an
employee of Sterritt and other entities Sterritt controlled and was a director of Zona and its
corporate secretary. She has never been registered with the Commission in any capacity and has
never held any securities licenses. On April 14, 2021, the Commission charged Mathews with
securities fraud and other violations based on her conduct related to Zona.
32. Christopher (“Chris”) Pittman (“Pittman”), age 53, resides in Dallas, Texas
and was Sterritt’s friend. At all relevant times, Pittman was a lawyer and member of the bar in
Texas and a managing member and co-founder of a law firm specializing in real estate and
business transactions. On April 14, 2021, the Commission charged Pittman with securities fraud
and other violations in connection with the Zona fraud. On December 15, 2022, also in
connection with the Zona fraud, Pittman was charged criminally in the Eastern District of New
York with conspiracy to commit securities fraud, conspiracy to commit wire fraud, securities
fraud, and conspiracy to commit money laundering. On October 13, 2023, Pittman pleaded guilty

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to conspiracy to commit securities fraud and conspiracy to commit wire fraud. Pittman has not
yet been sentenced for these crimes.
FACTUAL ALLEGATIONS
I. Background: The Prohibition on Selling Away, Arete Advisors’ Fiduciary Duties
and Compliance Obligations, and Arete Wealth’s Record-Keeping Obligations
A. Selling Away and Private Securities Transactions
33. During the Relevant Period, Arete Wealth was a broker-dealer firm in the
business of buying and selling securities on behalf of its customers (as broker), for its own
account (as dealer), or both.
34. The licensed sales personnel who worked for Arete Wealth, including the Arete
Representatives, were known as “registered representatives.”
35. Exchange Act Section 15(a) requires securities brokers and dealers to register
with the Commission.
36. FINRA requires individual registered representatives to sell all securities to
customers through the FINRA member firm with which they are associated, unless the registered
representative first has provided the firm with a required notice of a proposed transaction to be
effected “away from” the firm and unless the firm then has authorized the transaction to take
place away from the firm.
37. In the case of the Arete Representatives, the associated broker-dealer firm from
which they were required to seek approval to sell securities was Arete Wealth.
38. In compliance with FINRA rules, Arete Wealth’s operative written supervisory
procedures throughout the Relevant Period required the firm’s registered representatives,
including the Arete Representatives, to provide written notice to Arete’s CEO or CCO (or their
designee) describing in detail any private securities transaction, the representatives’ proposed

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role in the transaction, and notice of whether they would receive any compensation from the
proposed transaction.
39. The Arete Representatives were thus required to obtain written approval from
Arete’s CEO or CCO (or their designee) prior to engaging in any private securities transaction in
which they would receive compensation.
40. If Arete Wealth approved any such transaction, Arete Wealth was required to
record the transaction in its books and records and supervise the Arete Representatives’
participation in the transaction as if it were executed on behalf of Arete Wealth.
41. Selling securities—which includes solicitation of an offer to buy a security—to
brokerage customers without the approval of the registered representative’s associated broker-
dealer firm is a prohibited practice called “selling away.”
42. The prohibition on registered representatives’ “selling away” from their brokerage
firms is an important means to enhance investor protection and deter and prevent fraud on
members of the investing public by ensuring that registered broker-dealer firms are supervising
their representatives when they sell securities to customers.
43. Consequently, registered representatives who “sell away” from their broker-dealer
firms are acting as “unregistered brokers” in violation of Exchange Act Section 15(a).
B. Investment Advisers’ Fiduciary Duties to their Clients
44. During the Relevant Period, Arete Advisors, an affiliate of Arete Wealth, was in
the business of providing investment advice to clients for compensation.
45. The Arete Representatives were both registered representatives of Arete Wealth
and investment adviser representatives associated with Arete Advisors.

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46. As investment advisers, Arete Advisors and the Arete Representatives owed their
investment advisory clients two basic fiduciary duties—a duty of loyalty and a duty of care,
which apply to the entire adviser-client relationship.
47. A duty of loyalty requires acting with the utmost good faith, making full and fair
disclosure of all material facts, and employing reasonable care to avoid misleading clients.
The duty to disclose all material facts includes the duty to disclose all conflicts of interest that
might incentivize the adviser to render investment advice that is not disinterested. To
satisfy a duty of loyalty, an investment adviser who does not eliminate a conflict of interest with
its advisory client must make an adequate disclosure of such conflicts of interest to the client and
obtain the client’s informed consent to the conflict.
48. The duty of care includes the duty to provide advice that is in the best interest of
the client and to provide advice and monitoring over the course of the relationship.
49. Arete Advisors’ October 4, 2013 policies and procedures manual, which was in
effect during the Relevant Period, explained: “As a registered adviser, and as a fiduciary to our
advisory clients, our firm has a duty of loyalty and to always act in utmost good faith, place our
clients’ interests first and foremost and to make full and fair disclosure of all material facts and
in particular, information as to any potential and/or actual conflicts of interests.”
C. Investment Advisers’ Relevant Requirements
as to Compliance Policies and Procedures
50.  To protect investors, the federal securities laws require registered investment
advisory firms to create and maintain appropriate compliance policies and procedures to prevent
fraud and other misconduct by the firm’s advisory representatives.

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51. Advisers Act Section 206(4) and Rule 206(4)-7(a) thereunder require registered
investment advisers to adopt and implement written policies and procedures reasonably designed
to prevent violations of the Advisers Act.
52. Advisers Act Section 206(4) and Rule 206(4)-7(b) require registered investment
advisers to review their compliance policies and procedures annually to determine their adequacy
and the effectiveness of their implementation.
D. Broker-Dealers’ Relevant Recordkeeping Requirements
53. The securities laws require broker-dealer firms like Arete Wealth to retain certain
records, including electronic communications.
54. Electronic communications by broker-dealer personnel that occur on personal
devices, such as text messages sent or received on personal phones that are not preserved by the
broker-dealer firm, are often referred to as “off-channel communications.”
55. Rule 17a-4(b)(4), adopted under Section 17(a)(1) of the Exchange Act, requires
broker-dealers to preserve for at least three years, the first two years in an easily accessible place,
originals of all communications received and copies of all communications sent relating to the
broker-dealer’s “business as such.”
56. These provisions impose minimum recordkeeping requirements that are based on
standards a prudent broker-dealer should follow in the normal course of business.
57. These and other recordkeeping requirements protect investors by ensuring that the
Commission and other securities regulators can monitor broker-dealers’ compliance with
securities laws.
58. For over a decade, FINRA has advised its member broker-dealer firms about the
applicability of Rule 17a-4(b)(4) to off-channel communications.

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59. For instance, in an August 2011 notice, FINRA told member firms that the
requirement to retain communications under Rule 17a-4(b)(4) “would apply if the electronic
communication was received or sent by an associated person through a third-party’s platform
or system.”
60. A broker-dealer’s failure to retain records including off-channel communications
violates Exchange Act Section 17(a)(1) and Rule 17a-4(b)(4) thereunder.
61. As early as 2017, Arete Wealth’s Written Supervisory Procedures (the “Arete
Wealth Procedures”) included certain provisions designed to address Rule 17a-4(b)(4).
62. Specifically, the Arete Wealth Procedures mandated that “[b]usiness-related
emails must not be sent from non-Firm approved email accounts” (emphasis added) and required
the retention of all “retail and institutional communications.” The Arete Wealth Procedures made
clear that retail communications (meaning communications with a certain number of individual
investors), institutional communications, and correspondence were subject to review by the
firm’s CCO or his designee.
63. At least as early as 2017, the Arete Wealth Procedures also required the
preservation, for a period of at least three years, “[e]lectronic versions of the originals of all
communications received and copies of all communications sent by the Firm,” and prohibited
instant messaging.
64. In prohibiting instant messaging, the Arete Wealth Procedures cited the FINRA
2011 guidance stating that the retention requirements in Rule 17a-4(b)(4) would apply to
electronic communications sent or received by a broker-dealer’s associated persons (which
included registered representatives) using personal devices or technology.
65. In May 2023, Arete Wealth issued revised Procedures that continued to require
the retention of all retail and institutional communications according to Rule 17a-4 but also

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“prohibit[ed] the use of personal e-mail addresses, personal social networks, and other personal
electronic communication channels for business-related communications.”
66. These revised Procedures also dictated that business-related text messages could
be sent only via firm-approved platforms.
67. In at least 2021 and 2022, Arete Wealth’s registered representatives, including the
Arete Representatives, were required to complete an annual compliance questionnaire that
included the statement, “I understand that the only acceptable methods of communication with
clients is in person, over the telephone or by email.”
68. In 2023, the annual compliance questionnaire was revised to include the
statement, “I understand that the only acceptable methods of communication with clients is in
person, over the telephone, through an Arete Wealth authorized email address or through the
firm-approved texting app, MyRepChat.”
II. The Arete Representatives Unlawfully “Sell Away” Zona Securities
Without Arete Wealth’s Authorization.
A. Background: The Zona Fraud
69. Beginning in early 2018 through at least November 2020, Sterritt and his
associates raised more than $16 million from over 300 investors through a purported “private
placement” of Zona common stock in nationwide offerings. As a “private placement,” these
shares were purportedly only offered to select investors rather than to the general public through
an open exchange.
70. The fraudulent scheme began in early 2018, when Sterritt caused Zona to acquire,
through significant debt, certain leasehold mineral rights on the La Escalera Ranch (the
“Ranch”), a cattle ranch located in the oil-and-natural-gas-rich Permian Basin region of
West Texas.

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71. Sterritt—under the alias “Richard Richman”—and his associates then began
selling Zona shares and used the leasehold mineral interests in the Ranch to attract investors and
give Zona an air of legitimacy.
72. Sterritt lied repeatedly about Zona and failed to disclose to investors material
facts—including that Sterritt was a felon who had previously been convicted of securities fraud
and served several years in prison for his crimes.
73. Instead of using investor funds for Zona as he had represented to investors,
Sterritt misappropriated nearly all the money raised and used it for luxury goods—including for a
Bentley; for cash gifts to his family, friends, and girlfriends; to pay others involved in the
scheme; for various personal expenses; and for unrelated businesses he controlled.
74. Ultimately, Sterritt, as alleged in more detail in paragraph 30 above, and six other
defendants were criminally charged and convicted of securities fraud and other crimes in
connection with the fraudulent Zona scheme.
75. The Zona investors, including the investors the Arete Representatives solicited,
lost nearly all the money they invested in Zona.
B. The Arete Representatives Agree to Raise Capital for Zona from Investors
and Raise Significant Amounts from Their Customers and Clients While
Personally Investing in Zona, Often at Discounted Prices.
76. Pittman, as a director of Zona, worked closely with Sterritt in his efforts to raise
funds for Zona.
77. In the spring of 2018, Pittman introduced Zona to his friend, Michael Sealy
(“Sealy”), who subsequently invested in Zona.
78. Sterritt, Pittman, and Sealy agreed that Sealy would work to recruit additional
Zona investors and, in exchange for his solicitation efforts, would receive compensation in the
form of cash and discounted shares.

19
79. Although Sealy never received cash, he was compensated in the form of heavily
discounted shares, purchasing hundreds of thousands of shares for $0.01 per share.
80. One of the investors Sealy solicited was Miller, a business acquaintance, who first
purchased Zona shares in October 2018.
81. Miller then pitched Zona to certain Arete colleagues, including Jeff Larson, who
in turn introduced the potential investment to his brother, Randy Larson.
82. The Arete Representatives all invested in Zona, and, at the time, Zona was selling
its shares for $1 per share.
83. In September 2018, Miller submitted a standard form used to notify Arete Wealth
of a registered representative’s outside business activity, in accordance with the
firm’s Procedures.
84. In the form, Miller indicated that Zona was a personal investment from which he
derived no compensation and that did not involve any Arete customers as part of the business or
as potential customers of the business.
85. Jeff Larson and Randy Larson failed to provide any notice of their Zona
investments to Arete Wealth, despite the Arete Wealth Procedures’ requirement to do so.
86. Because Arete Wealth had not approved investments in Zona for its customers,
the Arete Representatives were prohibited from acting as brokers for Zona.
87. The Arete Representatives therefore could not receive commissions by brokering
transactions for Zona investments.
88. Yet by early 2019, Miller and Jeff Larson reached an initial agreement with
Sterritt—who used his “Richard Richman” alias in communicating with the Arete
Representatives—to raise capital for Zona by selling Zona shares to investors.

20
89. Instead of receiving commissions through Arete, as they normally would as
broker-dealer representatives, Miller and Jeff Larson agreed to solicit investors in exchange for
receiving discounted shares of Zona stock.
90. Randy Larson also agreed to raise capital for Zona.
91. From at least late 2018 to early 2019, Miller and Jeff Larson each exchanged texts
with Sterritt about their arrangement to solicit investors for Zona at $2.50 per share in exchange
for compensation, as described in the examples set forth in paragraphs 92 through 105 below.
92. On December 18, 2018, at 4:53 p.m., Sterritt texted Jeff Larson:
1

Jeff , thank you for taking time out of your schedule to come meet with us.
I felt good after meeting you and your associates . I think we can work out
a very mutually beneficial relationship and look forward to talking with
you again soon.
2

93. Jeff Larson responded to Sterritt, “Agreed Richard. We are very intrigued and
would love to get this off the ground.”
94. The next month, on January 9, 2019, at 6:06 p.m., Miller sent a text message to
Sterritt to confirm the price at which he and Jeff Larson would sell the Zona shares. Miller asked
Sterritt, “2.5 a share right?,” and Sterritt responded, “Yes sir.”
95. On January 9, 2019, at 8:06 p.m., Jeff Larson texted Sterritt that he and Miller
would each initially raise $1 million for Zona: “Hi Rich, Please hold 2M total for Joey and me.
We will both get in 1m.”
96. On January 10, 2019, at 2:42 p.m., Miller texted Sterritt that he had already raised
$1,120,000: “Are jeff and I raising 2.5 or 2 I ask because I’m at 1120000 right now including my

1
     All times alleged in this Complaint are in Pacific Time.
2

    All typographical errors in the emails and text messages alleged throughout this
Complaint appear in their original form.

21
200k And Jeff and I are splitting it So if It’s 2m I’m 120k over and I have t even scratched
the surface.”
97. Sterritt responded, “Your unbelievable!”
98. On January 11, 2019, at 7:20 p.m., Miller updated Sterritt on Miller’s progress:
“I’ll have another million in the next day or 2. I’m Just having a lot of people dip their toe in.”
99. Two minutes later, Miller texted Sterritt about his and Jeff Larson’s desired role
in raising capital for Zona: “We want to be the 2 guys you send in the field to talk to your clients
who have interest and we’ll lock them In and be your voice so you can focus on the company
and not have to mess with capital.”
100. Later that day in the same conversation, Sterritt responded to Miller: “You guys
keep up the good work and I assure you I am a fair man.”
101. Miller responded later the same day: “I never ask for a handout I’ll prove a great
partner over time.”
102. Continuing his previous comment about being a “fair man,” Sterritt wrote in the
same text conversation that day: “And generous!!! Ask Kate [Matthews] or the girls or any one
who has worked for me.”
103. Also in the same text conversation that evening, Sterritt told Miller: “I really
appreciate Michael [Sealy] making the decision to bring you guys on the team.”
104. Miller responded, “Yeah me too,” and, referring to Jeff Larson, added, “And I’m
happy I brought Jeff in,” and later added, “He can raise as much as me. We are a great team.”
105. Three days later, on January 14, 2019, at 10:39 a.m., referring to the amount he
had already raised for Zona from investors, Jeff Larson texted Sterritt: “I have my 1.25m lined
up, chat soon.”

22
106. By February 2019, the Arete Representatives had each already solicited numerous
investors, who had paid $2.50 per share for Zona stock.
107. At approximately the same time as the investors paid $2.50 per share, Miller and
Jeff Larson each purchased thousands of Zona shares at $1 per share.
108. Later in 2019, Zona insiders worked towards reaching additional agreements with
Miller and Jeff Larson to continue raising capital for Zona.
109. On July 11, 2019, a Zona insider wrote in an email to another Zona insider, on
which Sterritt and Pittman were copied: “Need agreement with Michael Sealy, Joey Miller, Jeff
Larson for continued selling activities for future partnerships. There is no agreement other than
verbal bull[expletive] with regard to their participation ($10,000).”
110. During the Relevant Period, the Arete Representatives sold over $8.5 million of
Zona stock to investors, including approximately 120 brokerage customers and/or advisory
clients of Arete Wealth or Arete Advisors, respectively, who in total purchased approximately
$6.3 million of Zona shares.
111. The Arete Representatives raised more than half of the total amount of money
Zona raised from investors.
C. The Arete Representatives Actively Sell Zona Stock to Their Customers and
Clients and Do So Without Arete’s Involvement.
112. During the Relevant Period and largely during telephone calls or in-person
meetings, the Arete Representatives encouraged certain customers and clients to invest in Zona
by recommending Zona to them—including, in Miller’s and Jeff Larson’s case, with material
misrepresentations and omissions, alleged below in Section III.
113. For example, on April 17, 2019, Jeff Larson sent an email from his personal email
address to one of his advisory clients—an entity that ran a summer camp and conference center

23
(the “Camp”)—and pitched the Camp on investing in Zona (the “Camp Email”): “I will tell you
that the buy is $2.50/share, I think it goes public around June at over $10/share. I think in 2 years
it can be at 35-50/share and has legs to go over 100/share.”
114. At times, the Arete Representatives discussed Zona during routine investment
meetings with clients, in which the Arete Representatives also discussed investments that Arete
had approved its representatives selling.
115. Instead of selling Zona shares through Arete, the Arete Representatives connected
dozens of investors to a Zona employee, Mathews, who then provided the investors with
necessary paperwork and accepted payment for the shares.
116. Investors’ funds thus flowed directly to Zona without passing through Arete or the
Arete Representatives.
117. For example, on January 19, 2019, an investor sent an email to Mathews, on
which Miller was copied, and wrote: “Katie, we spoke to Joey Miller and we are wanting to
invest $50,000 in the project. Please let us know what we need to do to wire the money
next week.”
118. Similarly, on January 21, 2019, Randy Larson sent an email to Mathews from his
law firm’s email account (not his Arete email account) and copied the relevant investor: “Hi
Katie – [investor] would like to invest 2,500. I’ll let him follow up with you on details, thanks!”
119. On March 6, 2019, in another example, Jeff Larson sent an email to Mathews
from his personal email account with the names and contact information for two of his advisory
clients and told Matthews that that they wanted “$5k worth of shares.”
120. On March 2, 2019, one of Randy Larson’s advisory clients emailed Mathews and
wrote: “Mr. Randy Larson encouraged us to connect with you regarding Zona investments.”

24
121. On April 12, 2019, Randy Larson sent Mathews an email with the subject line
“Zona at 2.5/share” and copied a potential investor.
122. In his email, Randy said, “Hi Katie, [investor] would like to invest, thx!”
123. On April 23, 2019, Randy Larson’s advisory client sent an email to Mathews that
Randy Larson “informed us yesterday that the $2.50/share price is still being offered to some
investors. Would that be an option for us?”
124. The Arete Representatives also played an active role in closing their sales of Zona
shares, as alleged in more detail in the examples below.
125. On January 22, 2019, an investor asked Miller, when other investors were paying
$2.50 per share for Zona stock, “[I]f I put $20k into Zona, can you get me in at the $1 per share
price?,” and Miller responded, “For you guys??? Consider it done. I’ll go to bat.”
126. In February 2019, this investor purchased $20,000 of Zona shares at $1 per share,
while nearly all of Miller’s other investors, including his advisory clients, paid $2.50 per share.
127. On February 13, 2019, Randy Larson sent an email to Mathews telling her that he
had advised one of his investors to “wire the money” for a $10,000 investment in Zona.
128. On February 27, 2019, Jeff Larson sent an email to Mathews to provide her with
the “proper titling” for the paperwork for one of his advisory client’s investments in Zona.
129. On March 11, 2019, Jeff Larson sent an email to Mathews that one of his advisory
clients and his wife wanted to purchase $25,000 worth of Zona shares and asked Mathews to get
information from him, including “the name of his trust to prepare the paperwork.”
130. On March 18, 2019, Jeff Larson sent an email to Mathews with the contact
information for an advisory client who wanted to invest $50,000 and told Mathews to “text him
if you need anything.”

25
131. On March 27, 2019, one of Miller’s advisory clients sent him an email saying:
“Hi Joey, I’ll give Katie [Mathews] a call tomorrow for my personal info. Did you guys get my
text about using $10k out of my TD Ameritrade account? Can those funds be transferred
from there?”
132. On April 12, 2019, one of Randy Larson’s advisory clients sent him an email
asking, “When will the liquidation in my account be available to invest with zona[?]”
133. Randy Larson responded, “Liquidated money available Monday.”
134. On April 26, 2019, Jeff Larson texted Sterritt to seek Sterritt’s help in convincing
one of Jeff Larson’s advisory clients to invest more money in Zona than the client had
originally intended:
Rich, I want to introduce you to my friend John. I shared Dicks report with
him. He is in Zona for 100k, but I told him with his net worth, he may
want to consider more. John had some more detailed questions you would
be better off answering. He is available to chat Monday after 10am. Would
you mind connecting?
135. At least some Arete customers and clients did not differentiate Zona from their
other Arete investments and continued to seek advice from the Arete Representatives about
Zona, just as they did about other Arete investments.
136. For example, on March 27, 2019, one of Miller’s advisory clients emailed Miller
a list of investments missing from her investment sheet, including Zona and other
Arete investments.
137. On August 13, 2019, after one of his advisory clients had asked him a question
about how to complete forms required for her Zona investment, Randy advised her by email to
say that she was an “individual subscriber” but that, if she used cash, she should list her husband
as a “co investor.”

26
138. On January 7, 2020, one of Jeff Larson’s advisory clients, who had already
purchased Zona shares, emailed Jeff Larson to ask him for help understanding some paperwork
from Zona and whether it made sense for him to purchase more shares.
D. Zona Tracks Which of the Arete Representatives To “Credit” for Selling
Shares to Each Investor.
139. Rather than keep track of which investors each of the Arete Representatives had
solicited through Arete’s books and records, Miller and Jeff Larson received periodically-
updated spreadsheets from Mathews matching each investor to the Arete Representative who had
solicited that investor.
140. Mathews also checked with Randy Larson to ensure that she was not missing any
investors attributable to him.
141. The spreadsheets that Mathews sent to Miller and Jeff Larson included the dollar
amount each investor invested and the number of shares each investor purchased.
142. Mathews kept these records at least in part to credit the one of Miller, Jeff Larson,
or Randy Larson who solicited each investor on the list.
143. On January 24, 2019, Mathews sent a group text message to Miller, Jeff Larson,
and Randy Larson when she did not know which of them to credit after receiving funds from
Zona investors who, instead of sending personal checks in their own names, had sent checks in
the names of entities associated with them. Mathews wrote: “Do either of you [sic] know who
would be associated with [a particular entity]? we received $50k today and I dobt know who to
credit. Also, yesterday we received another $50k from [a different entity]. Again, no name so I
don’t know who it is from. Please advise.”
144. Miller responded, “I don’t think that’s me I’m Guessing the Larson duo knows.”

27
145. Randy Larson responded next with names of possible investors whom he had
solicited but said he would need to check with the investors themselves if they were associated
with those entities.
146. Jeff Larson responded last and provided the correct name of one of the investors
he solicited who had sent one of the checks to Mathews.
147. Mathews checked with the Arete Representatives to ensure that the lists were
accurate and that all the investors on the lists had completed the required paperwork to invest
in Zona.
148. The Arete Representatives followed up with investors to ensure that they had
completed paperwork Mathews sent them and had sent in their money.
149. On May 30, 2019, Jeff Larson sent an email to Mathews: “I need to get on the
phone and make some things happen this afternoon. Please send me a list of all investors who
have signed documents but have not yet funded (make sure commitment amounts show) please.
Another list of any investor who has not yet signed and has not yet funded and
committed amount.”
150. On August 5, 2019, after Mathews had sent him an email with a list of investors
who had not filled out suitability forms required for them to invest in Zona, Randy Larson
responded to Mathews by email: “Hi Katie – did all my people fill out suitability and sign sub
docs? If not, let me know who and I’ll help track down. thx.”
E. The Arete Representatives Try to Conceal Their Zona Investor Solicitations.
151. The Arete Representatives tried to avoid discussing Zona on their work email
accounts, as described in more detail in the examples below.
152. On January 11, 2019, Miller sent a text message to Sterritt saying: “We have to be
careful as we don’t want any comment of this on our security emails.”

28
153. On March 12, 2019, Jeff Larson instructed Matthews by email: “Also, please do
not NOT email any of us at [Wealth Management Firm] about Zona.”
154. Mathews responded, “I am aware I am not to send you and Joey emails at work. If
I have sent emails to work, its because they emailed me from work and I simply hit ‘reply’.”
155. On March 18, 2019, Randy Larson sent an email from his Arete email account to
two of his clients who had invested in Zona but carefully avoided spelling out the name “Zona”
in his email: “Emailing now about Z from different account.”
156. On March 27, 2019, Miller sent an email to a client in response to her email to his
work account referencing Zona and, despite having solicited the client to invest in Zona, wrote:
“I don’t know what ZONA IS!! I Call me on that one plz.”
157. On April 17, 2019, in the Camp Email from his personal email account, Jeff
Larson wrote: “I need to email this opportunity away from my work email.”
158. On May 20, 2019, Mathews sent an email to Sterritt and other Zona insiders and
wrote: “I just spoke with Jeff Larson on an unrelated matter. . . . Jeff would like to navigate all
questions away from himself and Joey, if possible, especially to their business emails. (he said
some investors just don’t get that).”
159. The following year, on March 4, 2020, Pittman sent Mathews an email about
Zona and instructed Matthews: “Katie please text (NOT EMAIL) Joey a list of his investors.”
160. Matthew responded, “I understand he can’t get emails regarding this.”
III.   Miller and Jeff Larson Make Material Misrepresentations and Omissions to
Investors, Including Their Advisory Clients, When Selling Them Zona Stock.
161. In phone calls and meetings during the Relevant Period in which they solicited
investors to purchase Zona shares, Miller and Jeff Larson did not disclose to their investors,

29
including their advisory clients, that they had an agreement to raise capital for Zona in exchange
for compensation in the form of discounted shares of Zona stock.
162. During the Relevant Period, Miller and Jeff Larson also misrepresented to certain
investors, including Miller’s and Jeff Larson’s advisory clients, that they were not making any
money from Zona or suggested that they were recommending Zona only as a friend, as
alleged below.
163. For example, on April 17, 2019, in his Camp Email, Jeff Larson falsely claimed to
the Camp: “The money needs to be in by end of April. It doesn’t go through me as this is direct
with Zona. I have no benefit from this, I just love camp and all you guys do to guide it to
future years.”
164. In a follow up email to the Camp a few days later, on April 23, 2019, Jeff Larson
wrote: “I don’t think there is anything wrong from my end as I’m getting no pay for making the
connection of Camp and Zona, so no benefit to me.”
165. On April 25, 2019, the Camp purchased $50,000 worth of Zona shares at $2.50
per share.
166. Miller told at least one of his advisory clients that he was recommending Zona as
a friend.
167. Miller told at least another one of his advisory clients that he was not making any
money from his client’s investment in Zona.
168. Miller told at least one of his other advisory clients that he was not receiving a
commission for his client’s Zona investment.
169. Jeff Larson told at least one investor that he was never compensated for anyone’s
investment in Zona.

30
170. Jeff Larson told at least one of his other advisory clients that Zona had a lot of
potential and that he was bringing it to the investor’s attention as a friend.
IV.   FINRA Uncovers Jeff Larson’s Solicitation of a Zona Investor, and Randy Larson
and Jeff Larson Lie in Forms They Submit to Arete.
171. In September 2019, during an on-site FINRA examination of Jeff Larson and
Randy Larson’s Arete branch office, a FINRA examiner provided Chung with a hard copy of
Jeff Larson’s April 2019 Camp Email.
172. The same month, Jeff Larson and Randy Larson submitted outside business
activity forms to Arete regarding Zona, the same form that Miller had submitted in 2018.
173. Miller did not update the outside business activity form he had submitted in 2018.
174. In response to the question, “Does this activity involve Arete customers (either as
part of the business or as potential customers of the business)?”, Jeff Larson responded, “No.”
175. In response to the same question, Randy Larson also responded, “No.”
176. In response to the question, “What is your position, title or relationship with this
outside business?”, Jeff Larson responded, “Investor.”
177. In response to this same question, Randy Larson responded, “Stockholder.”
178. In response to the directive, “Describe your duties and responsibilities as well as
the products and services offered to this business:” Jeff Larson responded, “I have no duties, just
invested personal money into the opportunity.”
179. In response to this same directive,” Randy Larson responded, “none.”
180. In response to the directive, “Provide the date this activity began:” Jeff Larson
responded “04/15/2019.”
181. In response to this same directive, Randy Larson responded, “04/01/2019.”

31
182. Following FINRA’s examination, Chung interviewed each of the Arete
Representatives about Zona.
183. A review by Chung (or anyone else in Arete’s compliance department) of the
Arete Representatives’ email in November 2019 would have uncovered dozens of emails about
Zona with Arete clients or customers or others, notwithstanding the Arete Representatives’
efforts to keep these communications off Arete’s email system, as alleged above.
184. Chung did not contact any Arete customers or clients to whom the Arete
Representatives had recommended Zona.
185.  On November 1, 2019, Chung informed each of the Arete Representatives by
letter (in three separate letters) that he was placing them on heightened supervision.
186. In each of his letters to the Arete Representatives, Chung wrote:
You had previously verbally informed me about your intention to
personally invest in Zona stock but you were instructed not to introduce
this security to any Arete clients since this oil and gas investment was so
speculative.... FINRA rules do not permit the recommendation of
securities away from the firm.
187. Chung’s letter to Miller addressed certain emails in which Miller discussed Zona
with Arete clients. Chung wrote:
Based my conversations with you regarding this incident, I have
concluded that you discussed the investment with two close, longtime
friends who are also clients of the firm.... I understand that you did not
receive any remuneration of any sort if your friends actually invested
in Zona.
188. By November 1, 2019, Miller had in fact solicited at least 50 of his customers and
clients to invest in Zona, most of whom had paid $2.50 per share, and Miller had received
480,000 shares of Zona at $0.50 or $1.00 per share.
189. In his November 1, 2019, letter to Jeff Larson, Chung wrote:

32
As you know, FINRA has detected an April 17, 2019 email you sent to
one of your clients, [the] Camp, via your personal email account where
you appeared to have recommended an unapproved security product called
Zona.... Based my [sic] conversations with you regarding this incident, I
have concluded that you genuinely intended to perform a charitable act by
introducing the stock to your client and that you in no way stood to gain
any financial gain by doing so.
190. By November 1, 2019, Jeff Larson had in fact solicited at least 30 clients for
Zona, most of whom had paid $2.50 per share, and Jeff Larson had received 679,864 Zona shares
at either $0.50 or $1.00 per share.
191. In his November 1, 2019, letter to Randy Larson, Chung addressed certain emails
that FINRA had detected in which Randy Larson had discussed Zona with clients, and
Chung wrote:
Based on my conversations with you regarding this incident, I have
concluded that you discussed the investment with several close, longtime
friends who are also clients of the firm. I understand that you discussed
Zona with your friends in casual social settings when they prompted you
to discuss your personal investments.
192. By November 1, 2019, Randy Larson had in fact solicited at least 15 clients to
invest in Zona, all of whom had paid $2.50 per share.
193. Chung told the Arete Representatives that they would be assessed heightened
supervision fees of $5,000 per month effective November 15, 2019, which he explained in a
November 5, 2019 email to Randy Larson was “designed to provide us with a very thin cushion
should we be dragged into an arbitration.”
194. According to Arete’s Procedures, heightened supervision measures could include
a daily review of activity, frequent contact with customers by the supervisor, pre-approval of all
communications, and attendance in an outside training program.
195. The only one of these measures Chung imposed on the Arete Representatives was
the requirement to attend an outside training program.

33
196. By December 10, 2019, Chung, Arete’s CCO and Miller’s supervisor, had
removed Miller’s heightened supervision and told him by email:
Joey, After our phone call, I am persuaded that heightened supervision is
unwarranted and no additional measures will be imposed against you.
Specifically, I am convinced that you did not introduce the investment to
any investor and any of your clients who ultimately decided to invest did
so based on knowledge obtained from sources other than you.
V. An Anonymous Email Reveals Sterritt’s Alias and Prior Criminal Conviction to the
Arete Representatives, Zona Investors, and Chung.
197. On or around January 19, 2020, the Arete Representatives (along with at least
some other Zona investors) received an anonymous email stating that “Richard Richman” was an
alias of Sterritt, that he had federal convictions for conspiracy to commit securities fraud and
filing false tax returns, and that he had served several years in prison. The email accused Sterritt
of “business catfishing” in connection with Zona by creating a fake identify to target victims for
deception or fraud.
198. The day he received this email (the “Catfishing Email”), Jeff Larson called
Sterritt to alert him to it and to warn him of the inevitable ensuing investor alarm.
199. During the call (which Sterritt recorded), Sterritt told Jeff Larson that he had
changed his name eight or nine years prior, previously pleaded guilty to fraud, and spent time
in prison.
200. Jeff Larson asked Sterritt to figure out how to “get ahead” of the allegations.
201. Jeff Larson advised Sterritt to “fight fire with fire,” issue press releases, make
public statements, distinguish Zona from his prior dealings, and have someone credible vouch
for Zona to “shut down the fears.”
202. Sterritt assured Jeff Larson that he would do so.

34
203. During the call, Jeff Larson, concerned that the Catfishing Email would be sent to
his work email account, told Sterritt:
[I]f one person on our group at the front end of this deal decides to
forward that email to my – my work [inaudible] – which I’m sure
somebody will because they’re all dummies – somebody will do it, now
it’s in – on my work email. Now I’m – which is completely regulated
right now.
204. On January 27, 2020, Chung received a copy of the Catfishing email from another
Arete representative—not Miller, Jeff Larson or Randy Larson.
205. After learning of the Catfishing Email, Chung reported to a Commission staff
member that he had received an email indicating that Zona appeared to be a fraud.
206. Chung did not tell the Commission staff that the Arete Representatives had
previously sold Zona to investors or that he had placed them on heightened supervision as
a result.
VI.   Miller and Jeff Larson Continue At Least to Assist Their Clients
in Purchasing More Zona Shares.
207. By February 6, 2020, Zona had completed its one-for-one exchange with ERF,
and Zona was offering additional shares of ERF for $1 per share.
208. On that date, the Arete Representatives each received 250,000 ERF shares they
had purchased at only $0.04 per share.
209. Meanwhile, from February 6 through May 6, 2020, at least 31 of the investors
whom the Arete Representatives had previously solicited to invest in Zona again invested in
Zona, now ERF, at $1 per share.
210. None of the Arete Representatives informed their clients that they had purchased
shares at a lower price than their clients had paid.

35
211. On March 5, 2020, Jeff Larson texted one of his advisory clients with instructions
to contact Mathews and wrote, “Rich [Sterritt] confirmed $1/share.”
212. On March 17, 2020, the client invested $400,000 in Zona (ERF), and, on May 6,
2020, an additional $100,000.
213. On March 9, 2020, Miller texted Mathews that two of his clients wanted “to put
10k in at 1 a share they will call.”
214. Mathews responded to Miller by text, “She just called. She wants to put in $25k.
At $1.00 per share.”
215. Miller responded, “Yup. Let’s get docs out ASAP,” and Mathews replied, “On it.”
216. The next month, on April 24, 2020, Jeff Larson texted Mathews and asked her to
connect with one of his investors, who wanted to purchase more Zona (ERF) shares.
217. These 31 investors also lost nearly all of their money.
VII.  The Commission Files a Complaint Against Sterritt and Others, Which References
the Arete Representatives’ Role in Selling Zona Shares.
218. On April 8, 2021, a FINRA representative requested that Chung provide a list of
customers of Randy Larson, Jeff Larson, or any other Arete Wealth clients whom “the firm
believes invested in Zona Energy, along with the dates and amount of each such investment.”
219. On April 14, 2021, the Commission filed a complaint in the Eastern District of
New York charging Sterritt and six others with defrauding investors and engaging in market
manipulation in connection with the Zona fraud.
220. The same day, the Commission issued a press release about the complaint.
221. Without naming the Arete Representatives, the complaint alleged:
Sterritt and Pittman became acquainted with three dually-registered
investment adviser individuals/registered representatives at a dually-
registered investment adviser/broker-dealer firm, and, in exchange for
their commitment to raise at least $3 million, allowed the representatives

36
to buy Zona shares for as little as $0.04/share, compared with the
$1.00/share or $2.50/share price typically offered to other investors.
222. On that same day, the U.S. Attorney’s Office for the Eastern District of New York
filed an indictment charging five defendants, including Sterritt, with conspiracy to commit
securities fraud, wire fraud, and money laundering, among other offenses, in connection with the
Zona fraud.
223. Also on April 14, 2021, a FINRA representative forwarded the Commission’s
press release to Chung with a cover email requesting certain information about Zona:
Bob, below is a SEC press release. I presume that Arete confirmed that no
one other than Jeff Larson, Randy Larson [and two other Arete
representatives] had any involvement with Zona Energy? Please send me
an email confirming it. In addition, please let me know if Joey Miller
brought Zona to the attention of investors.
224. On April 16, 2021, in response to FINRA’s request earlier that month, Chung
instructed Arete personnel to cross-reference public over-the-counter market disclosures listing
investors in Zona with lists of Arete customers and clients.
225. Chung received a copy of the list later that day.
226. From the list, Arete personnel identified approximately 150 Arete clients who had
invested in Zona, 120 of whom were clients or customers of one of the Arete Representatives.
227. The list showed that approximately 60 of Miller’s clients or customers had
invested in Zona.
228. The list showed that approximately 40 of Jeff Larson’s clients or customers had
invested in Zona.
229. The list showed that approximately 20 of Randy Larson’s clients or customers had
invested in Zona.

37
230. Neither Chung, not anyone else in Arete’s compliance department, contacted any
Arete clients regarding any Arete representatives’ involvement, including the Arete
Representatives’ involvement, with their Zona investments.
231. On April 22, 2022, Chung provided the list to a senior director at FINRA.
232. In his letter accompanying the list, Chung claimed: “As we have previously
discussed, Arete does not have business records related to Zona investments made by any of
our clients.”
VIII. Chung and the Arete Representatives Procure Releases, Containing Material
Misrepresentations and Omissions and Unlawful Liability Waivers, from Clients.

A. Arete Demands That the Arete Representatives Obtain Liability Releases
from Arete Clients and Customers, and Chung Helps Lead the Effort.

233. Arete Wealth’s Procedures dated January 25, 2021, prohibited a firm
representative from making any payment to Arete Wealth customers to resolve an error or
customer complaint without express authorization from Arete.
234. The same Procedures also made clear that “[t]he CCO and/or the CEO...is
responsible for reviewing preliminary drafts of settlement agreements prior to execution by a
customer (current or former)” and for “determining that the terms and conditions are reasonable,
in accordance to just and equitable principles of trade, compliant with applicable state
regulations, and do not contain any impermissible confidentiality provisions, complaint
withdrawal provisions, or require the customer to repudiate or contradict prior claims
or complaints.”
235. In approximately the end of April 2021, Arete’s CEO convened a conference call
with the Arete Representatives, their individual counsel, Chung, and other members of
Arete’s management.

38
236. Addressing the Arete Representatives, Arete’s CEO chastised them on the call for
involving Arete customers and clients with Zona and told them: “You came into my living room
and took a giant [expletive] on my rug.”
237. Arete’s CEO demanded that the Arete Representatives hire and pay for an outside
law firm to draft settlement agreements releasing Arete from liability and that the Arete
Representatives ask their Arete customers and clients who had invested in Zona to sign
those releases.
238. Arete’s CEO delegated oversight of the releases to Chung, who worked with the
Arete Representatives’ counsel.
239. As Arete’s CCO and the Arete officer to whom Arete’s CEO had delegated
oversight of the releases, Chung was responsible for reviewing the releases before Arete’s
customers and clients signed them.
240. Beginning on April 27, 2023, Chung participated with the Arete Representatives’
individual counsel in numerous phone calls and emails regarding the releases.
241. Chung took an active role in shaping the contents of the releases.
242. Chung instructed the Arete Representatives to include a clause in each release
claiming that the Arete customer or client had not made his or her Zona investment through the
recommendation of an Arete representative.
243. Chung directed the Arete Representatives to pay customers and clients out of
pocket for signing the releases.
244. As directed, the Arete Representatives sought to have their advisory clients who
had invested in Zona sign the liability releases in return for payments.

39
245. While Arete and the Arete Representatives sought releases from their advisory
clients, Arete and the Arete Representatives continued to act as their clients’ investment advisers
and therefore continued to owe them a fiduciary duty.
246. Meanwhile, on May 9, 2021, Arete’s CEO sent Chung and Arete’s chief operating
officer a concerned email: “Heads up: I am worried that Jeff Larson’s biggest clients may be
possibly gearing up for litigation against him and/ or us.”
247. On the face of each release, the only parties to each release were ostensibly the
Arete customer or client, on the one hand, and the relevant Arete Representative, on the
other hand.
248. The Arete Representatives counter-signed the releases for each of their
respective clients.
B. The Releases Contain Material Misrepresentations and Omissions, as Chung
and the Arete Representatives Know.
249. Each of the releases falsely claimed that the relevant Arete customer or client who
had invested in Zona “understood that [the relevant one of Miller, Jeff Larson, or Randy Larson]
was not recommending an investment in Zona Energy, Inc. nor was [he] acting as a financial
adviser to INVESTOR” regarding the investors’ purchases in Zona.
250. The releases Miller’s and Jeff Larson’s clients signed disclosed—as Miller and
Jeff Larson had not done when they solicited their clients to invest in Zona stock—that Miller
and Jeff Larson had paid less for Zona shares than the investors whom they had solicited:
“INVESTOR is also aware that [Miller or Jeff Larson] purchased some shares in Zona at a price
per share less than INVESTOR paid, however, INVESTOR did not consider or ask what
[Representative] paid in making the decision to purchase.”

40
251. The releases did not disclose that Miller and Jeff Larson received discounted Zona
shares in return for agreeing to raise and in fact raising millions of dollars for Zona from
investors, including their Arete customers and clients.
C.   The Releases Unlawfully Purport to Release Arete from the Fiduciary
Duty It Owed Its Advisory Clients, as Chung Knows or At Least Recklessly
or Negligently Disregards.

252. The federal securities laws prohibit investment advisers from contracting to waive
the fiduciary duties that they owe their clients.
253. As the general counsel and CCO for a registered Commission broker-dealer and
investment adviser, Chung knew or at least recklessly or negligently disregarded this prohibition.
254. Most of the Releases contained broad language that purported to waive all
claims—not just those related to Zona—against both Arete Wealth and Arete Advisors.
255. Most of the Releases stated in relevant part:
Mutual Release. In consideration of the Parties’ mutual desire to avoid litigation, and
other good and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, INVESTOR, on the one hand, hereby releases [the relevant Arete
Representative], Arete Wealth Advisors, LLC, Arete Wealth Management, LLC, and
each of their past, present and future agents, representatives, shareholders, members,
managers, principals, attorneys, affiliates, parent corporations, subsidiaries, officers,
directors, employees, predecessors and successors and heirs, executors and assigns, from
any and all legal, equitable or other claims, counterclaims, demands, setoffs, defenses,
contracts, accounts, suits, debts, agreements, actions, causes of action, sums of money,
reckoning, damages, judgments, findings, controversies and disputes, and any past,
present or future duties, responsibilities, or obligations, whether known or unknown,
including, but not limited to, those claims that may arise relating to Zona Energy, Inc.
256. This language purported to broadly limit Arete Advisors’ liability by representing
that the client was waiving “any and all” claims—not just those related to Zona—including
claims arising out of gross negligence, willful misconduct, and even fraud on the investment
adviser’s part.

41
257. This language also purported to relieve Arete Advisors of “any past, present or
future duties,” including an adviser’s fiduciary duties to its clients.
D. Arete Clients Typically Signed the Releases in Return for $5,000 or Less
in Compensation.
258. The amounts the Arete Representatives paid advisory clients to sign the releases
ranged from $1, in the case of two of Randy Larson’s clients, to $100,000, in the case of one of
Jeff Larson’s clients.
259. In 91 of the approximately 103 releases signed by Arete customers and/or clients,
including customers and clients of the Arete Representatives, the relevant Arete representative
paid his client or customer $5,000 or less, an amount that generally was significantly lower than
the amount the client or customer had invested in Zona stock.
260. Chung collected and catalogued the Arete clients’ and customers’ executed
releases to track how many of them signed the releases.
261. During the tracking process, Chung learned that one of Randy Larson’s clients
had refused to sign the settlement agreement.
262. Chung told Randy Larson that he did not need to continue to pursue that
client’s signature.
263. By the end of September 2021, the Arete Representatives had paid approximately
$650,000 in consideration to their customers and clients in exchange for their waiving claims
relating to millions of dollars in purchases of Zona stock.
IX.   Even After the Commission Staff Warned Him, Chung Failed to Implement
Adequate Compliance Policies and Procedures for Arete Advisors for Years.
264. As Arete Advisors’ CCO, Chung was responsible for the firm’s compliance
policies and procedures during the Relevant Period.

42
265. The firm’s compliance policies and procedures originated from an outside
consulting firm.
266. On November 26, 2018, the Commission’s Division of Examinations (“Exams”)
issued a deficiency letter (the “Deficiency Letter”) to Arete Advisors, addressed to Chung and
Arete’s CEO, and informed them that Arete Advisors’ “Compliance Manual does not reflect
many of Registrant’s [Arete Advisors’] actual business practices with respect to its investment
advisory business.”
267. In its Deficiency Letter, Exams notified Arete Advisors of Exams’ conclusion that
the firm had violated Advisers Act Rule 206-(4)(7)(a) by failing to adopt policies and procedures
on topics such as “the purchase of alternative investments for its advisory clients, the factors
considered, whether the purchase should be made in an advisory or brokerage account, and the
disclosures made.”
268. The Deficiency Letter further found that “the various sections of the Compliance
Manual have not been updated since June 4, 2012, or October 4, 2013. It appears that Registrant
did not review the adequacy of its compliance policies and procedures annually.”
269. The Deficiency Letter notified Arete Advisors that Exams had concluded that the
“Registrant’s [Arete Advisors’] inadequate annual compliance reviews violate Rule 206(4)-7
under the Advisers Act and are inconsistent with the Compliance Manual. Registrant’s failure to
conduct adequate annual compliance reviews indicates a lack of diligence by management which
impairs the effectiveness of Registrant’s compliance program.”
270. On December 21, 2018, Chung wrote a response letter to Exams on behalf of
Arete Advisors (the “Response Letter”) and promised to add those topics to the compliance
manual and to “revise [Arete Advisors’] Compliance Manual to reflect its actual
business practices.”

43
271. In his Response Letter, Chung further represented to Exams that “Arete is in the
process of reviewing and updating its Compliance manual, and will ensure it conducts annual
reviews of its adequacy thereafter.”
272. Chung’s Response Letter also promised that “Arete will further undertake to
review the adequacy of its compliance policies and procedures annually.”
273. Chung’s Response Letter further represented that “Arete is in the process of
conducting a comprehensive review of its policies and procedures and will make all necessary
amendments to its Compliance Manual to ensure that it is current and consistent with the
Advisers Act.”
274. In subsequent years, Arete Advisors’ senior director of compliance asked Chung
multiple times to review and approve a new version of the compliance manual, to no avail.
275. For example, in an October 20, 2020 email to Chung, nearly two years after
Chung had sent the Response Letter to Exams, the senior director of compliance wrote to Chung
and Arete’s associate general counsel, “Just a reminder that we need to finish our RIA [registered
investment adviser] WSPs [Procedures] so I can push them out to the field. Please let me know
your comments when you have a moment.”
276. In April 2021, the senior director of compliance sent an email marked “High
Importance” to Chung and Arete Advisors’ associate general counsel and wrote:
We are currently running our [registered investment adviser] on 2016
procedures. Please find the attached up to date version. There are notes
and comments throughout that need to be addressed before this can be
rolled out to the field. Please review this as soon as possible.
277. The following year, on February 16, 2022, the senior director of compliance sent
yet another email marked “High Importance” to Chung and Arete Advisors’ associate general

44
counsel and wrote: “We need to address the Arete Wealth Advisors WSP’s [Procedures] (noted
copy attached). . . . Can we make time this week to address it?”
278. Approximately one year later, on February 17, 2023, the Commission sent a
subpoena to Arete Wealth and Arete Advisors in connection with its investigation into Zona
requesting, among other things, documents sufficient to identify certain of Arete’s policies and
procedures.
279. Between approximately December 2018 and May 2023, Arete Advisors and
Chung did not conduct annual reviews of the adequacy of the firm’s compliance policies and
procedures and the effectiveness of its implementation.
280. Between approximately December 2018 and May 2023, Arete Advisors and
Chung failed to tailor the firm’s compliance manual to accurately describe Arete’s business
or operations.
281. Arete Advisors did not add the topics referenced in the Deficiency Letter to the
firm’s compliance manual and disseminate a revised manual to its employees until May 2023,
approximately four and a half years after Chung had sent his Response Letter to Exams.
X.   Arete Wealth Violated Recordkeeping Requirements,
and the Arete Representatives Aided and Abetted These Violations.

282. Despite the requirements of Exchange Act Rule 17a-4(b)(4) and the Arete Wealth
Procedures, Arete personnel—including the firm’s CEO and the Arete Representatives—used
their personal phones to text about Arete Wealth’s business in a practice that was widespread at
the firm from at least January 2019.
283. For example, Arete’s CEO texted the Arete Representatives, Chung, and Arete’s
chief financial officer (“CFO”) approximately 1,380 times between September 2018 and
July 2023.

45
284. Even after Arete received a July 10, 2020 document request from the Commission
staff and a February 17, 2023 subpoena from the Commission staff, Arete’s CEO continued to
have an auto-delete function enabled on his personal phone until approximately May 2024, and
Arete failed to retain any of his messages.
285. Arete’s CEO encouraged the use of texting over personal devices. When a new
registered representative joined Arete, Arete’s CEO used his personal phone to text the
representative: “Text me with anything you need or anything you need fixed etc. You can text
me or call me 24/7.”
286. Chung and Arete’s CFO each included their personal cell phone numbers in their
signature blocks on their work email accounts as late as March 2024.
287. On many occasions beginning by at least 2019—just ten examples of which are
described below—Arete Wealth personnel, including the Arete Representatives, sent and
received text messages from their personal phones concerning Arete Wealth’s broker-
dealer business.
288. On January 24, 2019, Miller exchanged texts with Arete’s managing director of
capital markets concerning a selling agreement for an investment to be offered to Arete
customers.
289. On November 10, 2020, Jeff Larson texted Miller concerning distributions from
an investment sold to Arete customers, asking, “Do you anticipate any more [the investment’s]
MC Distributions this year?  If not, I’m going to start sweeping my cash accounts to [another
investment] if the[y] are under 20k.”
290. On December 1, 2020, Jeff Larson texted Miller and a new Arete registered
representative to introduce Miller to the new representative, wrote that she was “looking for 1m

46
of allocation” of an investment, and noted that “[s]he will rip [an investment offered to Arete
customers], you’ll get love.”
291. On December 8, 2020, Jeff Larson texted Arete’s CEO and Randy Larson about
the performance of a new Arete registered representative: “[The new registered representative] is
billing on -25M and already has 1.25M of alt tickets in compliance review. She just started doing
mtgs with her client and expects that number to grow. Before mtgs, she shows us the client and
randy and I help her strategize the alternatives.”
292. Arete’s CEO responded to the text with a thumbs-up emoji.
293. On February 25, 2021, Miller texted Jeff Larson, Randy Larson, and two other
Arete registered representatives about their fundraising efforts for an investment, wrote that there
were “2 deals in 60 days selling in [fund] 15,” and instructed the text participants to “[l]ook at
your paycheck. You should have 2 backend checks on it[.]”
294. On March 2, 2021, Miller and Jeff Larson exchanged texts discussing whether
Arete had approved certain investments to offer to their customers.
295. On March 27, 2021, Miller, Randy Larson, Jeff Larson, and another Arete
registered representative exchanged texts concerning whether they would need help fundraising
for an investment offered to Arete customers. Randy wrote, “[W]e have a ton coming but it takes
about 6 weeks to get flow after we start reviesw . . . we just got to week 8 so steady flow is
on now[.]”
296. On March 31 and April 9, 2021, Jeff Larson texted a customer concerning the
close of a deal and the quantity of funds to be distributed to the customer at closing.
297. In testimony before the Commission staff, Jeff Larson stated that Arete had
policies concerning text messaging, “[t]hat you can’t text message.”

47
298. Arete Wealth did not retain or preserve most of the written communications
concerning Arete’s business that its personnel sent from their personal phones.
TOLLING AGREEMENTS
299. Arete and the SEC entered into tolling agreements and extensions suspending the
running of any applicable statute of limitations from March 13, 2023, through September 13,
2023, from September 13, 2023, through March 13, 2024, from March 13, 2024, through
September 13, 2024, and from September 13, 2024, through March 13, 2025.
300. Miller and the SEC entered into tolling agreements and extensions suspending the
running of any applicable statute of limitations from March 14, 2023, through September 14,
2023, from September 14, 2023, through March 14, 2024, from March 14, 2024, through
September 14, 2024, and from September 14, 2024, through March 14, 2025.
301. Jeff Larson and the SEC entered into tolling agreements and extensions
suspecting the running of any applicable statute of limitations from March 23, 2023, through
September 23, 2023, from September 23, 2023, through March 23, 2024, from March 23, 2024,
through September 23, 2024, and from September 23, 2024, through March 23, 2025.
302. Randy Larson and the SEC entered into tolling agreements and extensions
suspending the running of any applicable statute of limitations from May 23, 2023, through
September 1, 2023, from September 1, 2023, through March 1, 2024, from March 1, 2024,
through September 1, 2024, and from September 1, 2024, through March 1, 2025.
303. Chung and the SEC entered into tolling agreements and extensions suspending the
running of any applicable statute of limitations from March 13, 2023, through September 13,
2023, from September 13, 2023, through March 13, 2024, and from March 13, 2024, through
September 13, 2024.

48
FIRST CLAIM FOR RELIEF
Violations of Exchange Act Section 10(b) and Rule 10b-5 Thereunder
(Miller and Jeff Larson)

304. The Commission realleges and incorporates by reference paragraphs 1 through
10, 16 through 43, 53 through 174, 176, 178, 180, 182 through 232, 299 through 303 as though
fully set forth herein.
305. Miller and Jeff Larson, directly or indirectly, singly or in concert, in connection
with the purchase or sale of securities and by the use of means or instrumentalities of interstate
commerce, or the mails, or the facilities of a national securities exchange, knowingly or
recklessly have (i) employed one or more devices, schemes, or artifices to defraud, (ii) made one
or more untrue statements of a material fact or omitted to state one or more material facts
necessary in order to make the statements made, in light of the circumstances under which they
were made, not misleading, and/or (iii) engaged in one or more acts, practices, or courses of
business which operated or would operate as a fraud or deceit upon other persons.
306. By reason of the foregoing, Miller and Jeff Larson, directly or indirectly, singly or
in concert, have violated and, unless enjoined, will again violate Exchange Act Section 10(b) [15
U.S.C. § 78j(b)] and Rule 10b-5 thereunder [17 C.F.R. § 240.10b-5].
SECOND CLAIM FOR RELIEF
Violations of Securities Act Section 17(a)
(Miller and Jeff Larson)

307. The Commission realleges and incorporates by reference paragraphs 1 through
10, 15 through 43, 53 through 174, 176, 178, 180, 182 through 232, 299 through 303 as though
fully set forth herein.
308. Miller and Jeff Larson directly or indirectly, singly or in concert, in the offer or
sale of securities and by the use of the means or instruments of transportation or communication
in interstate commerce or the mails, (1) knowingly or recklessly have employed a device, scheme

49
or artifice to defraud, (2) knowingly, recklessly, or negligently have obtained money or property
by means of untrue statements of a material fact or omissions of a material fact necessary in
order to make the statements made, in light of the circumstances under which they were made,
not misleading, or (3) knowingly or recklessly have engaged in a transaction, practice, or course
of business which operated as a fraud or deceit upon the purchaser.
309. By reason of the foregoing, Miller and Jeff Larson, directly or indirectly, singly or
in concert, have violated and, unless enjoined, will again violate Securities Act Section 17(a) [15
U.S.C. § 77q(a)].
THIRD CLAIM FOR RELIEF
Violations of Advisers Act Sections 206(1) and 206(2)
(Arete Advisors, Miller, Jeff Larson, and Randy Larson)

310. The Commission realleges and incorporates, as though fully set forth herein,
paragraphs 1 through 13, 16 through 49, 69 through 174, 176, 178, 180, 182 through 251, 258
through 263, 299 through 303 as to Miller and Jeff Larson; paragraph 1 through 13, 16 through
49, 69 through 172, 175, 177, 179, 181, 182 through 251, 258 through 263, 299 through 303 as
to Randy Larson; paragraphs 1 through 13, 16 through 49, 69 through 252, 258 through 263, 299
through 303 as to Arete Advisors’ violations of Advisers Act Section 206(1); paragraphs 1
through 13, 16 through 49, 69 through 263, 299 through 303 as to Arete Advisors’ violations of
Advisers Act Section 206(2).
311. Arete Advisors, Miller, Jeff Larson, and Randy Larson, directly or indirectly,
while acting as investment advisers, by use of the mails or the means and instrumentalities of
interstate commerce, have: (i) knowingly or recklessly employed devices, schemes, or artifices to
defraud clients or prospective clients, and/or (ii) knowingly, recklessly, or negligently engaged in
transactions, practices, and courses of business which operated or would have operated as a fraud
or deceit upon clients or prospective clients.

50
312. By reason of the foregoing, Arete Advisors, Miller, Jeff Larson, and Randy
Larson, directly or indirectly, singly or in concert, have violated and, unless enjoined, will again
violate Advisers Act Sections 206(1) and (2) [15 U.S.C. §§ 80b-6(1) and 80b-6(2)].
FOURTH CLAIM FOR RELIEF
Aiding and Abetting Violations of Advisers Act Sections 206(1) and 206(2)
(Miller, Jeff Larson, Randy Larson, and Chung)

313. The Commission realleges and incorporates by reference paragraphs 1 through
13, 16 through 49, 69 through 174, 176, 178, 180, 182 through 251, 258 through 263, 299
through 303 as to Miller and Jeff Larson; paragraphs 1 through 13, 16 through 49, 69 through
172, 175, 177, 179, 181, 182 through 251, 258 through 263, 299 through 303 as to Randy
Larson; 1 through 13, 16 through 49, 69 through 252, 258 through 263, 299 through 303 as to
Chung as though fully set forth herein.
314. Arete Advisors, Miller, Jeff Larson, and Randy Larson, directly or indirectly,
while acting as investment advisers, by use of the mails or the means and instrumentalities of
interstate commerce, have: (i) knowingly or recklessly employed devices, schemes, or artifices to
defraud clients or prospective clients, and/or (ii) knowingly, recklessly, or negligently engaged in
transactions, practices, and courses of business which operated or would have operated as a fraud
or deceit upon clients or prospective clients.
315. By reason of the foregoing, Miller, Jeff Larson, and Randy Larson, directly or
indirectly, singly or in concert, aided and abetted Arete Advisors’ violations of Advisers Act
Sections 206(1) and (2) [15 U.S.C. §§ 80b- 6(1) and 80b-6(2)] by knowingly or recklessly
providing substantial assistance to Arete Advisors’ violations, and Chung, directly or indirectly,
singly or in concert, aided and abetted Arete Advisors’, Miller’s, Jeff Larson’s, and/or Randy
Larson’s violations of Advisers Act Sections 206(1) and (2) [15 U.S.C. §§ 80b- 6(1) and 80b-

51
6(2)] by knowingly or recklessly providing substantial assistance to Arete Advisors’, Miller’s,
Jeff Larson’s, and/or Randy Larsons’ violations.
FIFTH CLAIM FOR RELIEF
Violations of Section 15(a) of the Exchange Act
(Miller, Randy Larson, and Jeff Larson)
316. The Commission realleges and incorporates by reference paragraphs 1 through
13, 15 through 43, 53 through 232, 299 through 303, as though fully set forth herein.
317. Miller, Randy Larson, and Jeff Larson each acted as brokers within the meaning
of Section 3(a)(4) of the Exchange Act [15 U.S.C. §78c(4)] by directly or indirectly, by the use
of the mails or the means of instrumentalities of interstate commerce, effecting transactions in, or
inducing or attempting to induce the purchase or sale of, Zona stock.
318. Miller, Randy Larson, and Jeff Larson were not registered with the Commission
in accordance with Section 15(b) of the Exchange Act [15 U.S.C. § 78o(b)], and their association
with Arete Wealth did not exempt them from registration for the transactions at issue as such
transactions were not made in the scope or course of their employment with Arete Wealth.
319. By reason of the conduct described above, Miller, Randy Larson, and Jeff Larson,
directly or indirectly, violated and, unless enjoined will again violate, Exchange Act Section
15(a) [15 U.S.C. § 78o(a)].
SIXTH CLAIM FOR RELIEF
Violations of Advisers Act Section 206(4) and Rule 206(4)-7 Thereunder
(Arete Advisors)

320. The Commission realleges and incorporates by reference paragraphs 14, 16
through 22, 24, 28, 50 through 52, 264 through 281, 299 through 303 as though fully set
forth herein.
321. From approximately November 2018 to May 2023, Arete Advisors failed to adopt
written policies and procedures reasonably designed to prevent Advisers Act violations by the

52
firm and its supervised persons and failed to conduct its required annual review of the adequacy
of its policies and procedures and the effectiveness of their implementation.
322. By reason of the foregoing, Arete Advisors, directly or indirectly, violated and
unless enjoined, will again violate Advisers Act Section 206(4) [15 U.S.C. § 80b-6(4)] and Rule
206(4)-7 thereunder [17 C.F.R. § 275.206(4)-7].
SEVENTH CLAIM FOR RELIEF
Aiding and Abetting Violations of Advisers Act
Section 206(4) and Rule 206(4)-7 Thereunder
(Chung)

323. The Commission realleges and incorporates by reference paragraphs 14, 16
through 22, 24, 28, 50 through 52, 264 through 281 as though fully set forth herein.
324. From approximately November 2018 to May 2023, Arete Advisors failed to adopt
written policies and procedures reasonably designed to prevent Advisers Act violations by the
firm and its supervised persons and failed to conduct its required annual review of the adequacy
of its policies and procedures and the effectiveness of their implementation.
325. By reason of the foregoing, Chung, directly or indirectly, singly or in concert,
aided and abetted Arete Advisors’ violations of 206(4) [15 U.S.C. § 80b-6(4)] and Rule 206(4)-7
thereunder [17 C.F.R. § 275.206(4)-7] by knowingly or recklessly providing substantial
assistance to Arete Advisors’ violations.
EIGHTH CLAIM FOR RELIEF
Violations of Exchange Act Section 17(a) and Rule 17a-4(b)(4) Thereunder
(Arete Wealth)

326. The Commission realleges and incorporates by reference paragraphs 14, 16
through 23, 25 through 28, 53 through 68, 282 through 298, 299 through 303 as though fully set
forth herein.

53
327. From approximately January 1, 2019 through May 2024, Arete Wealth failed to
preserve, for a period of not less than three years, originals of all communications received and
copies of all communications sent (and any approvals thereof) relating to its business as such.
328. By reason of the foregoing, Arete Wealth violated directly or indirectly, and
unless enjoined, will again violate Exchange Act Section 17(a) [15 U.S.C 78q(a)] and
Rule 17a-4(b)(4) [17 C.F.R. § 240.17a-4(b)(4)] thereunder.
NINTH CLAIM FOR RELIEF
Aiding and Abetting Violations of Exchange Act
Section 17(a) and Rule 17a-4(b)(4) Thereunder
(Miller, Jeff Larson, and Randy Larson)

329. The Commission realleges and incorporates by reference paragraphs 14, 16
through 23, 25 through 28, 53 through 68, 282 through 298, 299 through 303 as though fully set
forth herein.
330. From approximately January 1, 2019 through May 2024, Arete Wealth failed to
preserve, for a period of not less than three years, originals of all communications received and
copies of all communications sent (and any approvals thereof) relating to its business as such.
331. By reason of the foregoing, Miller, Jeff Larson, and Randy Larson, directly or
indirectly, singly or in concert, aided and abetted Arete Wealth’s violations of Exchange Act
Section 17(a) [15 U.S.C 78q(a)] and Rule 17a-4(b)(4) [17 C.F.R. § 240.17a-4(b)(4)] by
knowingly or recklessly providing substantial assistance to Arete Wealth’s violations.

54
PRAYER FOR RELIEF
WHEREFORE, the Commission respectfully requests that this Court grant the
following relief:
I.
Permanently enjoining Arete Advisors and its officers, agents, servants, employees and
attorneys and all persons in active concert or participation with any of them from violating,
directly or indirectly, Advisers Act Sections 206(1), 206(2), and 206(4), and Rule 206(4)-7
thereunder [17 C.F.R. § 275.206(4)-7)];
II.
Permanently enjoining Arete Wealth and its officers, agents, servants, employees and
attorneys and all persons in active concert or participation with any of them from violating,
directly or indirectly, Exchange Act Section 17(a) [15 U.S.C. § 78q(a)] and Rule 17a-4(b)(4)
thereunder [17 C.F.R. § 240.17a-4-(b)(4)];
III.
Permanently enjoining Miller and his agents, servants, employees and attorneys and all
persons in active concert or participation with any of them from violating, directly or indirectly,
Exchange Act Sections 15(a) and 10(b) [15 U.S.C §§ 78o(a) and 78j(b)] and Rule 10b-5
thereunder [17 C.F.R. § 275.10b-5]; Securities Act Section 17(a) [15 U.S.C. § 77q(a)]; and
Advisers Act Sections 206(1) and 206(2) [15 U.S.C. §§ 80b-6(1) and 80b-6(2)]; and Exchange
Act Section 17(a) [15 U.S.C. § 78q(a)] and Rule 17a-4 thereunder [17 C.F.R. § 240.17a-4];
IV.
Permanently enjoining Jeff Larson and his agents, servants, employees and attorneys and
all persons in active concert or participation with any of them from violating, directly or
indirectly, Exchange Act Sections 15(a) and 10(b) [15 U.S.C §§ 78o(a) and 78j(b)] and Rule

55
10b-5 thereunder [17 C.F.R. § 275.10b-5]; Securities Act Section 17(a) [15 U.S.C. § 77q(a)];
Advisers Act Sections 206(1) and 206(2) [15 U.S.C. §§ 80b-6(1) and 80b-6(2)]; and Exchange
Act Section 17(a) [15 U.S.C. § 78q(a)] and Rule 17a-4 thereunder [17 C.F.R. § 240.17a-4];
V.
Permanently enjoining Randy Larson and his agents, servants, employees and attorneys
and all persons in active concert or participation with any of them from violating, directly or
indirectly, Exchange Act Section 15(a) [15 U.S.C. § 78o(a)], Advisers Act Sections 206(1) and
206(2) [15 U.S.C. §§ 80b-6(1) and 80b-6(2)], and Exchange Act Section 17(a) [15 U.S.C.
§ 78q(a)] and Rule 17a-4 thereunder [17 C.F.R. § 240.17a-4];
VI.
Permanently enjoining Chung and his agents, servants, employees and attorneys and all
persons in active concert or participation with any of them from violating, directly or indirectly
Advisers Act Sections 206(1), 206(2), and 206(4) [15 U.S.C. § 80b-6(1), 80b-6(2), and 80b-
6(4)], and Rule 206(4)-7 thereunder [17 C.F.R. §§ 275.206(4)-7)];
VII.
Permanently prohibiting Miller, Jeff Larson, and Randy Larson from, directly or
indirectly, acting as or being associated with any broker, dealer, or investment adviser, pursuant
to Exchange Act Section 21(d)(5) [15 U.S.C. §78u(d)(5)]. This injunction shall not prevent the
Arete Representatives from being a customer or client of a broker, dealer, or investment
adviser. For purposes of this requested injunction, (a) a person is associated with a broker or
dealer if such person is a partner, officer, director, or branch manager of such broker or dealer (or
occupies a similar status or performs similar functions), directly or indirectly controls, is
controlled by, or is under common control with such broker or dealer, or is an employee of such
broker or dealer; and (b) a person is associated with an investment adviser if such person is a

56
partner, officer, or director of such investment adviser (or performs similar functions), or directly
or indirectly controls or is controlled by such investment adviser, including any employee of
such investment adviser;
VIII.
Permanently prohibiting Miller, Jeff Larson, and Randy Larson from participating in any
offering of a penny stock, including engaging in activities with a broker, dealer, or issuer for
purposes of issuing, trading, or inducing or attempting to induce the purchase or sale of any
penny stock, under Exchange Act Section 21(d)(6) [15 U.S.C. § 78u(d)(6)];
IX.
Permanently prohibiting Miller and Jeff Larson from serving as an officer or director of
any company that has a class of securities registered under Exchange Act Section 12 [15 U.S.C.
§ 78l] or that is required to file reports under Exchange Act Section 15(d) [15 U.S.C. § 78o(d)],
pursuant to Securities Act Section 20(e) [15 U.S.C. § 77t(e)] and Exchange Act Section 21(d)(2)
[15 U.S.C. § 78u(d)(2)];
X.
Permanently prohibiting Randy Larson from serving as an officer or director of any
company that has a class of securities registered under Exchange Act Section 12 [15 U.S.C. §
78l] or that is required to file reports under Exchange Act Section 15(d) [15 U.S.C. § 78o(d)],
pursuant to Exchange Act Section 21(d)(5) [15 U.S.C. § 78u(d)(5)];
XI.
Ordering Defendants to pay civil money penalties under Securities Act Section 20(d) [15
U.S.C. § 77t(d)], Exchange Act Section 21(d) [15 U.S.C. § 78u(d)(3)], and Advisers Act Section
209(e) [15 U.S.C. § 80b-9(e)];
XII.

57
     Grant such other and further relief as this Court may deem just and proper.
JURY DEMAND
The Commission demands a jury in this matter for all claims so triable.

Dated: January 17, 2025

Respectfully submitted,

By: /s/ Eric M. Phillips
U.S. SECURITIES AND EXCHANGE
COMMISSION
175 West Jackson Boulevard, Suite 1450
Chicago, Illinois 60604
Telephone: (312) 353-7390
Facsimile: (312) 353-7398
Email: [email protected]

Oren Gleich*
U.S. SECURITIES AND EXCHANGE
COMMISSION
100 Pearl Street, Suite 20-100
New York, NY 10004-2616
Telephone: (212) 336-0190
Facsimile: (212) 336-1319
Email: [email protected]

* Pro hac vice application forthcoming

UNITED STATES DISTRICT COURT 
NORTHERN DISTRICT OF ILLINOIS 

EASTERN DIVISION 

 
 
SECURITIES AND EXCHANGE 
COMMISSION, 
    Plaintiff, 
 v. 
 
ARETE WEALTH MANAGEMENT, LLC, 
ARETE WEALTH ADVISORS, LLC, 
JOEY DALE MILLER, 
JEFFREY SCOTT LARSON, 
RANDALL SCOTT LARSON, and 
UNBO CHUNG, 
 
    Defendants. 
 

 
 

 
 
 
 
Civil Action No. ___________ 
 
Jury Trial Demanded 
 

 

 
COMPLAINT 

 Plaintiff Securities and Exchange Commission (“Commission”), for its Complaint against 

Defendants Arete Wealth Management, LLC (“Arete Wealth”), Arete Wealth Advisors, LLC 

(“Arete Advisors”), Joey Dale Miller (“Miller”), Jeffrey Scott Larson (“Jeff Larson”), Randall 

Scott Larson (“Randy Larson”), and UnBo (“Bob”) Chung (“Chung”) (collectively, 

“Defendants”), alleges as follows: 

SUMMARY 

1. From approximately October 2018 to May 2020 (the “Relevant Period”), 

Defendants Miller and brothers Jeff Larson and Randy Larson (together, the “Arete 

Representatives”)—licensed sales representatives at Defendant Arete Wealth, a Commission-

registered broker-dealer, and investment adviser representatives at Defendant Arete Advisors, a 

Commission-registered investment adviser (together with Arete Wealth, “Arete”)—solicited 

dozens of their customers and clients to purchase stock in Zona Energy, Inc. (“Zona”) without 

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receiving Arete’s approval and therefore not subject to its compliance oversight, a prohibited 

practice called “selling away.” In the process, Miller and Jeff Larson defrauded investors. Later, 

they, along with Randy Larson and Chung—Arete’s general counsel and chief compliance 

officer (“CCO”) —obtained liability waivers, which they knew contained material 

misrepresentations and omissions, from their advisory clients, to whom they owed a fiduciary 

duty. This misconduct occurred while Arete engaged in long-running violations of record-

keeping provisions—through the Arete Representatives and others—and violations of 

compliance provisions—through Chung—of the federal securities laws.  

2. In approximately late 2018 through early 2019, Miller and Jeff Larson agreed 

with Zona’s control person, Richard Dale Sterritt, Jr. a/k/a Richard Richman (“Sterritt”), to raise 

money for Zona from investors in exchange for (at least) discounted shares of Zona, and Randy 

Larson joined the effort.  

3. Miller and Jeff Larson did not disclose this agreement to their customers and 

clients—despite owing a fiduciary duty to their advisory clients—and in some cases misled them 

into thinking Miller and Jeff Larson were recommending the stock without receiving anything 

in return.  

4. To try to conceal their conduct, Miller and Jeff Larson directed their customers 

and clients not to email them on their Arete email accounts, and they and Randy Larson emailed 

Arete customers and clients about Zona from non-Arete email accounts.   

5. In January 2020, the Arete Representatives and Chung received an anonymous 

email alleging that Richard “Richman” was in fact Richard Sterritt, a convicted felon who had 

served several years in prison for conspiracy to commit securities fraud and other crimes.   

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6. Yet between February and May 2020, some of the Arete Representatives’ 

customers and clients who had previously invested in Zona invested additional funds in Zona, 

and the Arete Representatives at least assisted certain of these investors in doing so.   

7. By May 2020, the Arete Representatives’ brokerage customers and advisory 

clients, along with other investors the Arete Representatives solicited, had invested more than 

$8.5 million in Zona—over half the total amount Zona raised from investors. 

8.  In April 2021, the U.S. Attorney’s Office for the Eastern District of New York 

and the Commission respectively filed criminal and civil charges against Sterritt and others 

alleging that Zona was a sham company and that Sterritt and other Zona insiders had 

misappropriated investor funds for luxury expenses. The Commission’s complaint also alleged 

that three representatives of a brokerage and investment advisory firm had agreed to raise funds 

for Zona in return for discounted shares of Zona stock.  

9. The same day these charges were filed, the Financial Industry Regulatory 

Authority (“FINRA”), a self-regulatory organization overseeing brokerage firms such as Arete 

Wealth, sent Chung an email requesting information on whether individuals at Arete had raised 

funds for Zona and specifically named Jeff Larson, Randy Larson, and Miller.  

10. By the end of the month, Arete had identified approximately 120 of its customers 

or clients who had invested in Zona, of which approximately 60 were Miller’s, approximately 40 

were Jeff Larson’s, and approximately 20 were Randy Larson’s.  

11. To try to limit Arete’s liability, Arete’s chief executive officer (“CEO”) 

demanded that the Arete Representatives obtain liability releases from their customers and 

clients who had invested in Zona and delegated oversight of this process to Chung, who worked 

with the Arete Representatives’ counsel.  

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12. Chung played an active role in this process and, although Arete Advisors and the 

Arete Representatives continued to owe fiduciary duties to their advisory clients, helped the 

Arete Representatives obtain broad liability releases from many of their customers and clients in 

return for payments typically ranging from $1 to $5,000—much less than most of these investors 

had invested in Zona.  

13. As Chung and the Arete Representatives knew (or at least recklessly or 

negligently disregarded), the releases falsely claimed that the investors understood that the Arete 

Representatives had not recommended investments in Zona and that the Arete Representatives 

were not acting as financial advisers when doing so. While the releases disclosed that Miller and 

Jeff Larson had purchased Zona shares at a discount, the releases misleadingly failed to disclose 

that Miller and Jeff Larson had received these shares in return for raising millions of dollars 

for Zona.  

14. The Arete Representatives’ misconduct occurred while Arete Advisors failed to 

comply with important compliance requirements and Arete Wealth failed to comply with key 

recordkeeping requirements. Arete Advisors, through Chung, failed to maintain adequate 

compliance policies and procedures and failed to conduct required annual reviews of the firm’s 

compliance policies for almost four years after Commission staff had warned Chung of these 

deficiencies in the firm’s compliance program. And many employees of Arete Wealth, including 

its CEO and the Arete Representatives, used their personal phones to communicate about firm 

business without retaining these messages in violation of recordkeeping provisions of the federal 

securities laws.  

15. Meanwhile, the Arete Representatives’ customers and clients and other investors 

the Arete Representatives solicited lost nearly all of the money they invested in Zona. 

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VIOLATIONS 

16. By virtue of the foregoing conduct and as alleged further herein: 

(a) Arete Advisors violated Sections 206(1), 206(2), and 206(4) of the Investment 

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

80b-6(4)] and Rule 206(4)-7 thereunder [17 C.F.R. § 275.206(4)-7)]; 

(b) Arete Wealth violated Section 17(a) of the Securities Exchange Act of 1934 

(“Exchange Act”) [15 U.S.C. § 78q(a)] and Rule 17a-4(b)(4) thereunder [17 

C.F.R. § 240.17a-4(b)(4)];  

(c) Miller violated Exchange Act Sections 15(a) and 10(b) [15 U.S.C §§ 78o(a) 

and 78j(b)] and Rule 10b-5 thereunder [17 C.F.R. § 275.10b-5]; violated 

Section 17(a) of the Securities Act of 1933 (“Securities Act”) [15 U.S.C. 

§ 77q(a)]; violated Advisers Act Sections 206(1) and 206(2) [15 U.S.C. 

§§ 80b-6(1) and 80b-6(2)], or, in the alternative, aided and abetted Arete 

Advisors’ violations of Advisers Act Sections 206(1) and 206(2) [15 U.S.C. 

§§ 80b-6(1) and 80b-6(2)]; and aided and abetted Arete Wealth’s violations of 

Exchange Act Section 17(a) [15 U.S.C. § 78q(a)] and Rule 17a-4 thereunder 

[17 C.F.R. § 240.17a-4]; 

(d) Jeff Larson violated Exchange Act Sections 15(a) and 10(b) [15 U.S.C 

§§ 78o(a) and 78j(b)] and Rule 10b-5 thereunder [17 C.F.R. § 275.10b-5]; 

violated Section 17(a) of the Securities Act of 1933 (“Securities Act”) [15 

U.S.C. § 77q(a)]; violated Advisers Act Sections 206(1) and 206(2) [15 

U.S.C. §§ 80b-6(1) and 80b-6(2)] or, in the alternative, aided and abetted 

Arete Advisors’ violations of Advisers Act Sections 206(1) and 206(2) [15 

U.S.C. §§ 80b-6(1) and 80b-6(2)]; and aided and abetted Arete Wealth’s 

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violations of Exchange Act Section 17(a) [15 U.S.C. § 78q(a)] and Rule 17a-4 

thereunder [17 C.F.R. § 240.17a-4];  

(e) Randy Larson violated Exchange Act Section 15(a) [15 U.S.C. § 78o(a)]; 

violated Advisers Act Sections 206(1) and 206(2) [15 U.S.C. §§ 80b-6(1) and 

80b-6(2)] or, in the alternative, aided and abetted Arete Advisors’ violations 

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

80b-6(2)]; and aided and abetted Arete Wealth’s violations of Exchange Act 

Section 17(a) [15 U.S.C. § 78q(a)] and Rule 17a-4 thereunder [17 C.F.R. 

§ 240.17a-4]; 

(f) Bob Chung aided and abetted Arete Advisors’, Miller’s, Jeff Larson’s, and/or 

Randy Larson’s violations of Advisers Act Sections 206(1) and 206(2) [15 

U.S.C. §§ 80b-6(1) and 80b-6(2)] and aided and abetted Arete Advisors’ 

violations of Advisers Act Section 206(4) [15 U.S.C. § 80b-6(4)] and Rule 

206(4)-7 thereunder [17 C.F.R. § 275.206(4)-7)]. 

17. Unless Defendants are restrained and enjoined, they will engage in the acts, 

practices, transactions, and courses of business set forth in this Complaint or in acts, practices, 

transactions, and courses of business of similar type and object.  

NATURE OF THE PROCEEDINGS AND RELIEF SOUGHT 

18. The Commission brings this action pursuant to the authority conferred upon it by 

Securities Act Sections 20(b) and 20(d) [15 U.S.C. §§ 77t(b) and 77t(d)], Exchange Act Section 

21(d) [15 U.S.C. § 78u(d)], and Advisers Act Sections 209(d) and 209(e) [15 U.S.C. §§ 80b-9(d) 

and 80b-9(e)].  

19. The Commission seeks a final judgment: (a) permanently enjoining Defendants 

from violating the federal securities laws and rules this Complaint alleges they have violated; 

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(b) permanently prohibiting Miller, Jeff Larson, and Randy Larson from, directly or indirectly, 

acting as or being associated with any broker, dealer, or investment adviser, pursuant to 

Exchange Act Section 21(d)(5) [15 U.S.C. §78u(d)(5)]. This injunction shall not prevent the 

Arete Representatives from being a customer or client of a broker, dealer, or investment 

adviser. For purposes of this requested injunction, (i) a person is associated with a broker or 

dealer if such person is a partner, officer, director, or branch manager of such broker or dealer (or 

occupies a similar status or performs similar functions), directly or indirectly controls, is 

controlled by, or is under common control with such broker or dealer, or is an employee of such 

broker or dealer; and (ii) a person is associated with an investment adviser if such person is a 

partner, officer, or director of such investment adviser (or performs similar functions), or directly 

or indirectly controls or is controlled by such investment adviser, including any employee of 

such investment adviser; (c) permanently prohibiting Miller, Jeff Larson, and Randy Larson from 

participating in any offering of a penny stock, including engaging in activities with a broker, 

dealer, or issuer for purposes of issuing, trading, or inducing or attempting to induce the purchase 

or sale of any penny stock, under Exchange Act Section 21(d)(6) [15 U.S.C. § 78u(d)(6)]; 

(d) permanently prohibiting Miller and Jeff Larson from serving as an officer or director of any 

company that has a class of securities registered under Exchange Act Section 12 [15 U.S.C. § 

78l] or that is required to file reports under Exchange Act Section 15(d) [15 U.S.C. § 78o(d)], 

pursuant to Securities Act Section 20(e) [15 U.S.C. § 77t(e)] and Exchange Act Section 21(d)(2) 

[15 U.S.C. § 78u(d)(2)]; (e) permanently prohibiting Randy Larson from serving as an officer or 

director of any company that has a class of securities registered under Exchange Act Section 12 

[15 U.S.C. § 78l] or that is required to file reports under Exchange Act Section 15(d) [15 U.S.C. 

§ 78o(d)], pursuant to Exchange Act Section 21(d)(5) [15 U.S.C. § 78u(d)(5)]; (f) Ordering 

Defendants to pay civil money penalties under Securities Act Section 20(d) [15 U.S.C. § 77t(d)], 

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Exchange Act Section 21(d) [15 U.S.C. § 78u(d)(3)], and Advisers Act Section 209(e) [15 

U.S.C. § 80b-9(e)]; and (g) ordering any other and further relief the Court may deem just 

and appropriate. 

JURISDICTION AND VENUE 

20. This Court has jurisdiction over this action pursuant to Securities Act Section 

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

Section 214 [15 U.S.C. § 80b-14]. 

21. Defendants have, directly or indirectly, made use of the means or 

instrumentalities of interstate commerce or of the mails, in connection with the transactions, acts, 

practice, and courses of business alleged in this Complaint.  

22. Venue lies in this Court pursuant to Section 22(a) [15 U.S.C. § 77v(a)], Exchange 

Act Section 27 [15 U.S.C. § 78aa], and Advisers Act Section 214 [15 U.S.C. § 80b-1]. Certain of 

the acts, practices, transactions and courses of business alleged in this Complaint occurred within 

the Northern District of Illinois, where Defendant Chung resides and where Defendants Arete 

Wealth and Arete Advisers had its principal offices during the Relevant Period.  

DEFENDANTS 

23. Arete Wealth is a Connecticut limited liability company (“LLC”) with its 

principal office in Chicago, Illinois. It has been registered with the Commission as a 

broker-dealer since August 1998. In 2000, Arete Wealth was the subject of regulatory sanctions 

by the National Association for Securities Dealers (“NASD”), a self-regulatory organization, for 

alleged violations of NASD Rules 1018, 2210, and 3110 related to firm commitment 

underwriting. In 2012, the firm was the subject of FINRA sanctions for its alleged violations of 

FINRA Rule 2010 and NASD Conduct Rule 3010 based on its failure to enforce its written 

supervisory procedures regarding due diligence for private offerings.  

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24. Arete Advisors is a Nevada LLC with its principal office in Chicago, Illinois. It 

has been registered with the Commission as an investment adviser since January 2009.  

According to Arete Advisors’ Form ADV filed on August 15, 2024, it has approximately 

$2.67 billion in regulatory assets under management. 

25. Joey Miller, age 47, resides in New Braunfels, Texas. Miller is currently a 

registered representative of a broker-dealer and an investment adviser representative of an 

investment adviser affiliated with the same broker-dealer. From 2014 until October 2023, Miller 

was a registered representative of Arete Wealth and an investment adviser representative of 

Arete Advisors. Miller is the founder and principal of a private wealth management firm that 

formerly operated as a branch office of Arete and is now associated with the broker-dealer and 

investment adviser firm he is currently associated with. Miller holds Series 22, 63, 65, and 

Securities Industry Essentials (“SIE”) securities licenses. 

26. Jeff Larson, age 41, resides in Fenton, Missouri. Jeff Larson is currently an 

investment adviser representative, managing partner, and co-founder (with Randy Larson) of a 

private wealth management firm (the “Wealth Management Firm”) that formerly operated as a 

branch office of Arete. The Wealth Management Firm has been registered with the Commission 

as an investment adviser since February 11, 2022, which offers securities through a broker-

dealer. From August 2017 through October 2023, Larson was a registered representative of Arete 

Wealth and an investment adviser representative of Arete Advisors. Jeff Larson holds Series 7, 

66, and SIE securities licenses. 

27. Randy Larson, age 43, resides in St. Louis, Missouri and is Jeff Larson’s brother. 

Randy Larson co-founded the Wealth Management Firm he and Jeff Larson are associated with, 

is an investment adviser representative of the Wealth Management Firm, and is a registered 

representative with the Wealth Management Firm’s broker-dealer. From 2017 through October 

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2023, Randy was a registered representative of Arete Wealth and an investment adviser 

representative of Arete Advisors. He holds Series 7, 66 and SIE securities licenses. Randy 

Larson is also an attorney and a member of the Missouri state bar. 

28. Chung, age 53, resides in Chicago, Illinois. Chung has been Arete Wealth’s and 

Arete Advisors’ CCO and general counsel since at least 2014. He also supervised the Arete 

Representatives. Before joining Arete, Chung was a senior regional counsel for FINRA for 

nearly a decade. He holds Series 7, 14, 24, and 66 securities licenses. Chung is registered as an 

attorney with the Illinois Attorney Registration & Disciplinary Commission. 

OTHER RELEVANT INDIVIDUALS AND ENTITIES 

29. Zona was a privately held Texas corporation with its principal place of business 

in Dallas, Texas. In marketing materials, Zona described its business as “focused on the 

acquisition, development, exploration and exploitation of unconventional, onshore oil and 

natural gas reserves in the Permian Basin in West Texas.” Zona was not registered with the 

Commission. Zona never registered any offering of its securities under the Securities Act or any 

class of its securities under the Exchange Act. Zona’s equity security was a penny stock, as 

defined in Section 3(a)(51) of the Exchange Act and Rule 3a51-1 thereunder. On June 29, 2020, 

Zona Resources, Inc., a wholly-owned subsidiary of ERF Wireless, Inc. (“ERF”)—which at the 

time was a publicly-traded company whose common stock was quoted on OTC Link, an 

electronic inter-dealer quotation system—announced that it had completed a share exchange with 

Zona, whereby Zona shareholders received shares of ERF. The Zona shares that investors 

purchased through the Arete Representatives were held by a transfer agent prior to the 

share exchange. 

30. Sterritt, age 68, is currently incarcerated at the Metropolitan Detention Center 

Brooklyn. In April 2003, Sterritt pleaded guilty to an indictment charging him with conspiracy to 

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 11

commit securities fraud, money laundering, and filing false income tax returns. He was 

sentenced to five years’ imprisonment. On April 14, 2021, in connection with his conduct in 

fraudulently operating Zona and offering its shares, Sterritt was charged in the U.S. District 

Court for the Eastern District of New York (“Eastern District of New York”) with conspiracy to 

commit securities and wire fraud, multiple counts of securities fraud, and conspiracy to commit 

money laundering. On the same day, the Commission filed a complaint in the same federal 

district court charging Sterritt with violations of Sections 5(a), 5(c), and 17(a) of the Securities 

Act, Sections 9(a), 15(a), and 10(b) of the Exchange Act, and Rule 10b-5 under the Exchange 

Act. On November 27, 2023, Sterritt pleaded guilty in the criminal proceeding to conspiracy to 

commit securities and wire fraud, multiple counts of securities fraud, and conspiracy to commit 

money laundering. Sterritt has not yet been sentenced for these crimes. 

31. Katie Mathews (“Mathews”), age 61, resides in Tucson, Arizona. She was an 

employee of Sterritt and other entities Sterritt controlled and was a director of Zona and its 

corporate secretary. She has never been registered with the Commission in any capacity and has 

never held any securities licenses. On April 14, 2021, the Commission charged Mathews with 

securities fraud and other violations based on her conduct related to Zona.  

32. Christopher (“Chris”) Pittman (“Pittman”), age 53, resides in Dallas, Texas 

and was Sterritt’s friend. At all relevant times, Pittman was a lawyer and member of the bar in 

Texas and a managing member and co-founder of a law firm specializing in real estate and 

business transactions. On April 14, 2021, the Commission charged Pittman with securities fraud 

and other violations in connection with the Zona fraud. On December 15, 2022, also in 

connection with the Zona fraud, Pittman was charged criminally in the Eastern District of New 

York with conspiracy to commit securities fraud, conspiracy to commit wire fraud, securities 

fraud, and conspiracy to commit money laundering. On October 13, 2023, Pittman pleaded guilty 

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to conspiracy to commit securities fraud and conspiracy to commit wire fraud. Pittman has not 

yet been sentenced for these crimes. 

FACTUAL ALLEGATIONS 

I. Background: The Prohibition on Selling Away, Arete Advisors’ Fiduciary Duties 
and Compliance Obligations, and Arete Wealth’s Record-Keeping Obligations  

A. Selling Away and Private Securities Transactions 

33. During the Relevant Period, Arete Wealth was a broker-dealer firm in the 

business of buying and selling securities on behalf of its customers (as broker), for its own 

account (as dealer), or both.  

34. The licensed sales personnel who worked for Arete Wealth, including the Arete 

Representatives, were known as “registered representatives.”   

35. Exchange Act Section 15(a) requires securities brokers and dealers to register 

with the Commission.  

36. FINRA requires individual registered representatives to sell all securities to 

customers through the FINRA member firm with which they are associated, unless the registered 

representative first has provided the firm with a required notice of a proposed transaction to be 

effected “away from” the firm and unless the firm then has authorized the transaction to take 

place away from the firm.  

37. In the case of the Arete Representatives, the associated broker-dealer firm from 

which they were required to seek approval to sell securities was Arete Wealth.  

38. In compliance with FINRA rules, Arete Wealth’s operative written supervisory 

procedures throughout the Relevant Period required the firm’s registered representatives, 

including the Arete Representatives, to provide written notice to Arete’s CEO or CCO (or their 

designee) describing in detail any private securities transaction, the representatives’ proposed 

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role in the transaction, and notice of whether they would receive any compensation from the 

proposed transaction.  

39. The Arete Representatives were thus required to obtain written approval from 

Arete’s CEO or CCO (or their designee) prior to engaging in any private securities transaction in 

which they would receive compensation.  

40. If Arete Wealth approved any such transaction, Arete Wealth was required to 

record the transaction in its books and records and supervise the Arete Representatives’ 

participation in the transaction as if it were executed on behalf of Arete Wealth.  

41. Selling securities—which includes solicitation of an offer to buy a security—to 

brokerage customers without the approval of the registered representative’s associated broker-

dealer firm is a prohibited practice called “selling away.”  

42. The prohibition on registered representatives’ “selling away” from their brokerage 

firms is an important means to enhance investor protection and deter and prevent fraud on 

members of the investing public by ensuring that registered broker-dealer firms are supervising 

their representatives when they sell securities to customers.   

43. Consequently, registered representatives who “sell away” from their broker-dealer 

firms are acting as “unregistered brokers” in violation of Exchange Act Section 15(a).  

B. Investment Advisers’ Fiduciary Duties to their Clients  

44. During the Relevant Period, Arete Advisors, an affiliate of Arete Wealth, was in 

the business of providing investment advice to clients for compensation.   

45. The Arete Representatives were both registered representatives of Arete Wealth 

and investment adviser representatives associated with Arete Advisors.   

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46. As investment advisers, Arete Advisors and the Arete Representatives owed their 

investment advisory clients two basic fiduciary duties—a duty of loyalty and a duty of care, 

which apply to the entire adviser-client relationship.   

47. A duty of loyalty requires acting with the utmost good faith, making full and fair 

disclosure of all material facts, and employing reasonable care to avoid misleading clients. 

The duty to disclose all material facts includes the duty to disclose all conflicts of interest that 

might incentivize the adviser to render investment advice that is not disinterested. To 

satisfy a duty of loyalty, an investment adviser who does not eliminate a conflict of interest with 

its advisory client must make an adequate disclosure of such conflicts of interest to the client and 

obtain the client’s informed consent to the conflict. 

48. The duty of care includes the duty to provide advice that is in the best interest of 

the client and to provide advice and monitoring over the course of the relationship. 

49. Arete Advisors’ October 4, 2013 policies and procedures manual, which was in 

effect during the Relevant Period, explained: “As a registered adviser, and as a fiduciary to our 

advisory clients, our firm has a duty of loyalty and to always act in utmost good faith, place our 

clients’ interests first and foremost and to make full and fair disclosure of all material facts and 

in particular, information as to any potential and/or actual conflicts of interests.” 

C. Investment Advisers’ Relevant Requirements                                                                    
as to Compliance Policies and Procedures 

50.  To protect investors, the federal securities laws require registered investment 

advisory firms to create and maintain appropriate compliance policies and procedures to prevent 

fraud and other misconduct by the firm’s advisory representatives.  

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51. Advisers Act Section 206(4) and Rule 206(4)-7(a) thereunder require registered 

investment advisers to adopt and implement written policies and procedures reasonably designed 

to prevent violations of the Advisers Act.  

52. Advisers Act Section 206(4) and Rule 206(4)-7(b) require registered investment 

advisers to review their compliance policies and procedures annually to determine their adequacy 

and the effectiveness of their implementation.  

D. Broker-Dealers’ Relevant Recordkeeping Requirements  

53. The securities laws require broker-dealer firms like Arete Wealth to retain certain 

records, including electronic communications.  

54. Electronic communications by broker-dealer personnel that occur on personal 

devices, such as text messages sent or received on personal phones that are not preserved by the 

broker-dealer firm, are often referred to as “off-channel communications.” 

55. Rule 17a-4(b)(4), adopted under Section 17(a)(1) of the Exchange Act, requires 

broker-dealers to preserve for at least three years, the first two years in an easily accessible place, 

originals of all communications received and copies of all communications sent relating to the 

broker-dealer’s “business as such.”   

56. These provisions impose minimum recordkeeping requirements that are based on 

standards a prudent broker-dealer should follow in the normal course of business.  

57. These and other recordkeeping requirements protect investors by ensuring that the 

Commission and other securities regulators can monitor broker-dealers’ compliance with 

securities laws.  

58. For over a decade, FINRA has advised its member broker-dealer firms about the 

applicability of Rule 17a-4(b)(4) to off-channel communications.  

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59. For instance, in an August 2011 notice, FINRA told member firms that the 

requirement to retain communications under Rule 17a-4(b)(4) “would apply if the electronic 

communication was received or sent by an associated person through a third-party’s platform 

or system.”  

60. A broker-dealer’s failure to retain records including off-channel communications 

violates Exchange Act Section 17(a)(1) and Rule 17a-4(b)(4) thereunder. 

61. As early as 2017, Arete Wealth’s Written Supervisory Procedures (the “Arete 

Wealth Procedures”) included certain provisions designed to address Rule 17a-4(b)(4).   

62. Specifically, the Arete Wealth Procedures mandated that “[b]usiness-related 

emails must not be sent from non-Firm approved email accounts” (emphasis added) and required 

the retention of all “retail and institutional communications.” The Arete Wealth Procedures made 

clear that retail communications (meaning communications with a certain number of individual 

investors), institutional communications, and correspondence were subject to review by the 

firm’s CCO or his designee. 

63. At least as early as 2017, the Arete Wealth Procedures also required the 

preservation, for a period of at least three years, “[e]lectronic versions of the originals of all 

communications received and copies of all communications sent by the Firm,” and prohibited 

instant messaging.   

64. In prohibiting instant messaging, the Arete Wealth Procedures cited the FINRA 

2011 guidance stating that the retention requirements in Rule 17a-4(b)(4) would apply to 

electronic communications sent or received by a broker-dealer’s associated persons (which 

included registered representatives) using personal devices or technology. 

65. In May 2023, Arete Wealth issued revised Procedures that continued to require 

the retention of all retail and institutional communications according to Rule 17a-4 but also 

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“prohibit[ed] the use of personal e-mail addresses, personal social networks, and other personal 

electronic communication channels for business-related communications.”   

66. These revised Procedures also dictated that business-related text messages could 

be sent only via firm-approved platforms.    

67. In at least 2021 and 2022, Arete Wealth’s registered representatives, including the 

Arete Representatives, were required to complete an annual compliance questionnaire that 

included the statement, “I understand that the only acceptable methods of communication with 

clients is in person, over the telephone or by email.”   

68. In 2023, the annual compliance questionnaire was revised to include the 

statement, “I understand that the only acceptable methods of communication with clients is in 

person, over the telephone, through an Arete Wealth authorized email address or through the 

firm-approved texting app, MyRepChat.” 

II. The Arete Representatives Unlawfully “Sell Away” Zona Securities                        
Without Arete Wealth’s Authorization.  

A. Background: The Zona Fraud 

69. Beginning in early 2018 through at least November 2020, Sterritt and his 

associates raised more than $16 million from over 300 investors through a purported “private 

placement” of Zona common stock in nationwide offerings. As a “private placement,” these 

shares were purportedly only offered to select investors rather than to the general public through 

an open exchange. 

70. The fraudulent scheme began in early 2018, when Sterritt caused Zona to acquire, 

through significant debt, certain leasehold mineral rights on the La Escalera Ranch (the 

“Ranch”), a cattle ranch located in the oil-and-natural-gas-rich Permian Basin region of 

West Texas.  

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71. Sterritt—under the alias “Richard Richman”—and his associates then began 

selling Zona shares and used the leasehold mineral interests in the Ranch to attract investors and 

give Zona an air of legitimacy.  

72. Sterritt lied repeatedly about Zona and failed to disclose to investors material 

facts—including that Sterritt was a felon who had previously been convicted of securities fraud 

and served several years in prison for his crimes.  

73. Instead of using investor funds for Zona as he had represented to investors, 

Sterritt misappropriated nearly all the money raised and used it for luxury goods—including for a 

Bentley; for cash gifts to his family, friends, and girlfriends; to pay others involved in the 

scheme; for various personal expenses; and for unrelated businesses he controlled.  

74. Ultimately, Sterritt, as alleged in more detail in paragraph 30 above, and six other 

defendants were criminally charged and convicted of securities fraud and other crimes in 

connection with the fraudulent Zona scheme.  

75. The Zona investors, including the investors the Arete Representatives solicited, 

lost nearly all the money they invested in Zona. 

B. The Arete Representatives Agree to Raise Capital for Zona from Investors 
and Raise Significant Amounts from Their Customers and Clients While 
Personally Investing in Zona, Often at Discounted Prices. 

76. Pittman, as a director of Zona, worked closely with Sterritt in his efforts to raise 

funds for Zona.  

77. In the spring of 2018, Pittman introduced Zona to his friend, Michael Sealy 

(“Sealy”), who subsequently invested in Zona.  

78. Sterritt, Pittman, and Sealy agreed that Sealy would work to recruit additional 

Zona investors and, in exchange for his solicitation efforts, would receive compensation in the 

form of cash and discounted shares.  

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79. Although Sealy never received cash, he was compensated in the form of heavily 

discounted shares, purchasing hundreds of thousands of shares for $0.01 per share. 

80. One of the investors Sealy solicited was Miller, a business acquaintance, who first 

purchased Zona shares in October 2018.  

81. Miller then pitched Zona to certain Arete colleagues, including Jeff Larson, who 

in turn introduced the potential investment to his brother, Randy Larson.  

82. The Arete Representatives all invested in Zona, and, at the time, Zona was selling 

its shares for $1 per share.  

83. In September 2018, Miller submitted a standard form used to notify Arete Wealth 

of a registered representative’s outside business activity, in accordance with the 

firm’s Procedures.  

84. In the form, Miller indicated that Zona was a personal investment from which he 

derived no compensation and that did not involve any Arete customers as part of the business or 

as potential customers of the business.  

85. Jeff Larson and Randy Larson failed to provide any notice of their Zona 

investments to Arete Wealth, despite the Arete Wealth Procedures’ requirement to do so.  

86. Because Arete Wealth had not approved investments in Zona for its customers, 

the Arete Representatives were prohibited from acting as brokers for Zona.  

87. The Arete Representatives therefore could not receive commissions by brokering 

transactions for Zona investments.  

88. Yet by early 2019, Miller and Jeff Larson reached an initial agreement with 

Sterritt—who used his “Richard Richman” alias in communicating with the Arete 

Representatives—to raise capital for Zona by selling Zona shares to investors.  

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89. Instead of receiving commissions through Arete, as they normally would as 

broker-dealer representatives, Miller and Jeff Larson agreed to solicit investors in exchange for 

receiving discounted shares of Zona stock.  

90. Randy Larson also agreed to raise capital for Zona.   

91. From at least late 2018 to early 2019, Miller and Jeff Larson each exchanged texts 

with Sterritt about their arrangement to solicit investors for Zona at $2.50 per share in exchange 

for compensation, as described in the examples set forth in paragraphs 92 through 105 below.  

92. On December 18, 2018, at 4:53 p.m., Sterritt texted Jeff Larson:1  

Jeff , thank you for taking time out of your schedule to come meet with us. 
I felt good after meeting you and your associates . I think we can work out 
a very mutually beneficial relationship and look forward to talking with 
you again soon.2  

93. Jeff Larson responded to Sterritt, “Agreed Richard. We are very intrigued and 

would love to get this off the ground.” 

94. The next month, on January 9, 2019, at 6:06 p.m., Miller sent a text message to 

Sterritt to confirm the price at which he and Jeff Larson would sell the Zona shares. Miller asked 

Sterritt, “2.5 a share right?,” and Sterritt responded, “Yes sir.” 

95. On January 9, 2019, at 8:06 p.m., Jeff Larson texted Sterritt that he and Miller 

would each initially raise $1 million for Zona: “Hi Rich, Please hold 2M total for Joey and me. 

We will both get in 1m.” 

96. On January 10, 2019, at 2:42 p.m., Miller texted Sterritt that he had already raised 

$1,120,000: “Are jeff and I raising 2.5 or 2 I ask because I’m at 1120000 right now including my 

 
1
  All times alleged in this Complaint are in Pacific Time. 

2  All typographical errors in the emails and text messages alleged throughout this 
Complaint appear in their original form.   

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200k And Jeff and I are splitting it So if It’s 2m I’m 120k over and I have t even scratched 

the surface.”  

97. Sterritt responded, “Your unbelievable!”  

98. On January 11, 2019, at 7:20 p.m., Miller updated Sterritt on Miller’s progress: 

“I’ll have another million in the next day or 2. I’m Just having a lot of people dip their toe in.” 

99. Two minutes later, Miller texted Sterritt about his and Jeff Larson’s desired role 

in raising capital for Zona: “We want to be the 2 guys you send in the field to talk to your clients 

who have interest and we’ll lock them In and be your voice so you can focus on the company 

and not have to mess with capital.”  

100. Later that day in the same conversation, Sterritt responded to Miller: “You guys 

keep up the good work and I assure you I am a fair man.”  

101. Miller responded later the same day: “I never ask for a handout I’ll prove a great 

partner over time.”  

102. Continuing his previous comment about being a “fair man,” Sterritt wrote in the 

same text conversation that day: “And generous!!! Ask Kate [Matthews] or the girls or any one 

who has worked for me.”  

103. Also in the same text conversation that evening, Sterritt told Miller: “I really 

appreciate Michael [Sealy] making the decision to bring you guys on the team.”  

104. Miller responded, “Yeah me too,” and, referring to Jeff Larson, added, “And I’m 

happy I brought Jeff in,” and later added, “He can raise as much as me. We are a great team.” 

105. Three days later, on January 14, 2019, at 10:39 a.m., referring to the amount he 

had already raised for Zona from investors, Jeff Larson texted Sterritt: “I have my 1.25m lined 

up, chat soon.” 

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106. By February 2019, the Arete Representatives had each already solicited numerous 

investors, who had paid $2.50 per share for Zona stock.  

107. At approximately the same time as the investors paid $2.50 per share, Miller and 

Jeff Larson each purchased thousands of Zona shares at $1 per share.  

108. Later in 2019, Zona insiders worked towards reaching additional agreements with 

Miller and Jeff Larson to continue raising capital for Zona.  

109. On July 11, 2019, a Zona insider wrote in an email to another Zona insider, on 

which Sterritt and Pittman were copied: “Need agreement with Michael Sealy, Joey Miller, Jeff 

Larson for continued selling activities for future partnerships. There is no agreement other than 

verbal bull[expletive] with regard to their participation ($10,000).”  

110. During the Relevant Period, the Arete Representatives sold over $8.5 million of 

Zona stock to investors, including approximately 120 brokerage customers and/or advisory 

clients of Arete Wealth or Arete Advisors, respectively, who in total purchased approximately 

$6.3 million of Zona shares.  

111. The Arete Representatives raised more than half of the total amount of money 

Zona raised from investors.   

C. The Arete Representatives Actively Sell Zona Stock to Their Customers and 
Clients and Do So Without Arete’s Involvement.  

112. During the Relevant Period and largely during telephone calls or in-person 

meetings, the Arete Representatives encouraged certain customers and clients to invest in Zona 

by recommending Zona to them—including, in Miller’s and Jeff Larson’s case, with material 

misrepresentations and omissions, alleged below in Section III.  

113. For example, on April 17, 2019, Jeff Larson sent an email from his personal email 

address to one of his advisory clients—an entity that ran a summer camp and conference center 

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(the “Camp”)—and pitched the Camp on investing in Zona (the “Camp Email”): “I will tell you 

that the buy is $2.50/share, I think it goes public around June at over $10/share. I think in 2 years 

it can be at 35-50/share and has legs to go over 100/share.” 

114. At times, the Arete Representatives discussed Zona during routine investment 

meetings with clients, in which the Arete Representatives also discussed investments that Arete 

had approved its representatives selling. 

115. Instead of selling Zona shares through Arete, the Arete Representatives connected 

dozens of investors to a Zona employee, Mathews, who then provided the investors with 

necessary paperwork and accepted payment for the shares.  

116. Investors’ funds thus flowed directly to Zona without passing through Arete or the 

Arete Representatives.   

117. For example, on January 19, 2019, an investor sent an email to Mathews, on 

which Miller was copied, and wrote: “Katie, we spoke to Joey Miller and we are wanting to 

invest $50,000 in the project. Please let us know what we need to do to wire the money 

next week.” 

118. Similarly, on January 21, 2019, Randy Larson sent an email to Mathews from his 

law firm’s email account (not his Arete email account) and copied the relevant investor: “Hi 

Katie – [investor] would like to invest 2,500. I’ll let him follow up with you on details, thanks!” 

119. On March 6, 2019, in another example, Jeff Larson sent an email to Mathews 

from his personal email account with the names and contact information for two of his advisory 

clients and told Matthews that that they wanted “$5k worth of shares.” 

120. On March 2, 2019, one of Randy Larson’s advisory clients emailed Mathews and 

wrote: “Mr. Randy Larson encouraged us to connect with you regarding Zona investments.” 

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121. On April 12, 2019, Randy Larson sent Mathews an email with the subject line 

“Zona at 2.5/share” and copied a potential investor.  

122. In his email, Randy said, “Hi Katie, [investor] would like to invest, thx!”  

123. On April 23, 2019, Randy Larson’s advisory client sent an email to Mathews that 

Randy Larson “informed us yesterday that the $2.50/share price is still being offered to some 

investors. Would that be an option for us?” 

124. The Arete Representatives also played an active role in closing their sales of Zona 

shares, as alleged in more detail in the examples below.  

125. On January 22, 2019, an investor asked Miller, when other investors were paying 

$2.50 per share for Zona stock, “[I]f I put $20k into Zona, can you get me in at the $1 per share 

price?,” and Miller responded, “For you guys??? Consider it done. I’ll go to bat.”  

126. In February 2019, this investor purchased $20,000 of Zona shares at $1 per share, 

while nearly all of Miller’s other investors, including his advisory clients, paid $2.50 per share. 

127. On February 13, 2019, Randy Larson sent an email to Mathews telling her that he 

had advised one of his investors to “wire the money” for a $10,000 investment in Zona.  

128. On February 27, 2019, Jeff Larson sent an email to Mathews to provide her with 

the “proper titling” for the paperwork for one of his advisory client’s investments in Zona. 

129. On March 11, 2019, Jeff Larson sent an email to Mathews that one of his advisory 

clients and his wife wanted to purchase $25,000 worth of Zona shares and asked Mathews to get 

information from him, including “the name of his trust to prepare the paperwork.” 

130. On March 18, 2019, Jeff Larson sent an email to Mathews with the contact 

information for an advisory client who wanted to invest $50,000 and told Mathews to “text him 

if you need anything.” 

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131. On March 27, 2019, one of Miller’s advisory clients sent him an email saying: 

“Hi Joey, I’ll give Katie [Mathews] a call tomorrow for my personal info. Did you guys get my 

text about using $10k out of my TD Ameritrade account? Can those funds be transferred 

from there?” 

132. On April 12, 2019, one of Randy Larson’s advisory clients sent him an email 

asking, “When will the liquidation in my account be available to invest with zona[?]”  

133. Randy Larson responded, “Liquidated money available Monday.” 

134. On April 26, 2019, Jeff Larson texted Sterritt to seek Sterritt’s help in convincing 

one of Jeff Larson’s advisory clients to invest more money in Zona than the client had 

originally intended:  

Rich, I want to introduce you to my friend John. I shared Dicks report with 
him. He is in Zona for 100k, but I told him with his net worth, he may 
want to consider more. John had some more detailed questions you would 
be better off answering. He is available to chat Monday after 10am. Would 
you mind connecting? 

135. At least some Arete customers and clients did not differentiate Zona from their 

other Arete investments and continued to seek advice from the Arete Representatives about 

Zona, just as they did about other Arete investments.  

136. For example, on March 27, 2019, one of Miller’s advisory clients emailed Miller 

a list of investments missing from her investment sheet, including Zona and other 

Arete investments.    

137. On August 13, 2019, after one of his advisory clients had asked him a question 

about how to complete forms required for her Zona investment, Randy advised her by email to 

say that she was an “individual subscriber” but that, if she used cash, she should list her husband 

as a “co investor.” 

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138. On January 7, 2020, one of Jeff Larson’s advisory clients, who had already 

purchased Zona shares, emailed Jeff Larson to ask him for help understanding some paperwork 

from Zona and whether it made sense for him to purchase more shares. 

D. Zona Tracks Which of the Arete Representatives To “Credit” for Selling 
Shares to Each Investor.  

139. Rather than keep track of which investors each of the Arete Representatives had 

solicited through Arete’s books and records, Miller and Jeff Larson received periodically-

updated spreadsheets from Mathews matching each investor to the Arete Representative who had 

solicited that investor.  

140. Mathews also checked with Randy Larson to ensure that she was not missing any 

investors attributable to him. 

141. The spreadsheets that Mathews sent to Miller and Jeff Larson included the dollar 

amount each investor invested and the number of shares each investor purchased.  

142. Mathews kept these records at least in part to credit the one of Miller, Jeff Larson, 

or Randy Larson who solicited each investor on the list.  

143. On January 24, 2019, Mathews sent a group text message to Miller, Jeff Larson, 

and Randy Larson when she did not know which of them to credit after receiving funds from 

Zona investors who, instead of sending personal checks in their own names, had sent checks in 

the names of entities associated with them. Mathews wrote: “Do either of you [sic] know who 

would be associated with [a particular entity]? we received $50k today and I dobt know who to 

credit. Also, yesterday we received another $50k from [a different entity]. Again, no name so I 

don’t know who it is from. Please advise.”  

144. Miller responded, “I don’t think that’s me I’m Guessing the Larson duo knows.”  

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145. Randy Larson responded next with names of possible investors whom he had 

solicited but said he would need to check with the investors themselves if they were associated 

with those entities.  

146. Jeff Larson responded last and provided the correct name of one of the investors 

he solicited who had sent one of the checks to Mathews. 

147. Mathews checked with the Arete Representatives to ensure that the lists were 

accurate and that all the investors on the lists had completed the required paperwork to invest 

in Zona.  

148. The Arete Representatives followed up with investors to ensure that they had 

completed paperwork Mathews sent them and had sent in their money.   

149. On May 30, 2019, Jeff Larson sent an email to Mathews: “I need to get on the 

phone and make some things happen this afternoon. Please send me a list of all investors who 

have signed documents but have not yet funded (make sure commitment amounts show) please. 

Another list of any investor who has not yet signed and has not yet funded and 

committed amount.” 

150. On August 5, 2019, after Mathews had sent him an email with a list of investors 

who had not filled out suitability forms required for them to invest in Zona, Randy Larson 

responded to Mathews by email: “Hi Katie – did all my people fill out suitability and sign sub 

docs? If not, let me know who and I’ll help track down. thx.” 

E. The Arete Representatives Try to Conceal Their Zona Investor Solicitations.  

151. The Arete Representatives tried to avoid discussing Zona on their work email 

accounts, as described in more detail in the examples below.  

152. On January 11, 2019, Miller sent a text message to Sterritt saying: “We have to be 

careful as we don’t want any comment of this on our security emails.” 

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153. On March 12, 2019, Jeff Larson instructed Matthews by email: “Also, please do 

not NOT email any of us at [Wealth Management Firm] about Zona.”  

154. Mathews responded, “I am aware I am not to send you and Joey emails at work. If 

I have sent emails to work, its because they emailed me from work and I simply hit ‘reply’.” 

155. On March 18, 2019, Randy Larson sent an email from his Arete email account to 

two of his clients who had invested in Zona but carefully avoided spelling out the name “Zona” 

in his email: “Emailing now about Z from different account.”  

156. On March 27, 2019, Miller sent an email to a client in response to her email to his 

work account referencing Zona and, despite having solicited the client to invest in Zona, wrote: 

“I don’t know what ZONA IS!! I Call me on that one plz.”  

157. On April 17, 2019, in the Camp Email from his personal email account, Jeff 

Larson wrote: “I need to email this opportunity away from my work email.” 

158. On May 20, 2019, Mathews sent an email to Sterritt and other Zona insiders and 

wrote: “I just spoke with Jeff Larson on an unrelated matter. . . . Jeff would like to navigate all 

questions away from himself and Joey, if possible, especially to their business emails. (he said 

some investors just don’t get that).” 

159. The following year, on March 4, 2020, Pittman sent Mathews an email about 

Zona and instructed Matthews: “Katie please text (NOT EMAIL) Joey a list of his investors.”  

160. Matthew responded, “I understand he can’t get emails regarding this.” 

III. Miller and Jeff Larson Make Material Misrepresentations and Omissions to 
Investors, Including Their Advisory Clients, When Selling Them Zona Stock.  

161. In phone calls and meetings during the Relevant Period in which they solicited 

investors to purchase Zona shares, Miller and Jeff Larson did not disclose to their investors, 

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including their advisory clients, that they had an agreement to raise capital for Zona in exchange 

for compensation in the form of discounted shares of Zona stock.  

162. During the Relevant Period, Miller and Jeff Larson also misrepresented to certain 

investors, including Miller’s and Jeff Larson’s advisory clients, that they were not making any 

money from Zona or suggested that they were recommending Zona only as a friend, as 

alleged below.  

163. For example, on April 17, 2019, in his Camp Email, Jeff Larson falsely claimed to 

the Camp: “The money needs to be in by end of April. It doesn’t go through me as this is direct 

with Zona. I have no benefit from this, I just love camp and all you guys do to guide it to 

future years.”   

164. In a follow up email to the Camp a few days later, on April 23, 2019, Jeff Larson 

wrote: “I don’t think there is anything wrong from my end as I’m getting no pay for making the 

connection of Camp and Zona, so no benefit to me.”  

165. On April 25, 2019, the Camp purchased $50,000 worth of Zona shares at $2.50 

per share.  

166. Miller told at least one of his advisory clients that he was recommending Zona as 

a friend.  

167. Miller told at least another one of his advisory clients that he was not making any 

money from his client’s investment in Zona.  

168. Miller told at least one of his other advisory clients that he was not receiving a 

commission for his client’s Zona investment. 

169. Jeff Larson told at least one investor that he was never compensated for anyone’s 

investment in Zona.  

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170. Jeff Larson told at least one of his other advisory clients that Zona had a lot of 

potential and that he was bringing it to the investor’s attention as a friend.  

IV. FINRA Uncovers Jeff Larson’s Solicitation of a Zona Investor, and Randy Larson 
and Jeff Larson Lie in Forms They Submit to Arete.  

171. In September 2019, during an on-site FINRA examination of Jeff Larson and 

Randy Larson’s Arete branch office, a FINRA examiner provided Chung with a hard copy of 

Jeff Larson’s April 2019 Camp Email.  

172. The same month, Jeff Larson and Randy Larson submitted outside business 

activity forms to Arete regarding Zona, the same form that Miller had submitted in 2018.  

173. Miller did not update the outside business activity form he had submitted in 2018.  

174. In response to the question, “Does this activity involve Arete customers (either as 

part of the business or as potential customers of the business)?”, Jeff Larson responded, “No.”  

175. In response to the same question, Randy Larson also responded, “No.”  

176. In response to the question, “What is your position, title or relationship with this 

outside business?”, Jeff Larson responded, “Investor.” 

177. In response to this same question, Randy Larson responded, “Stockholder.” 

178. In response to the directive, “Describe your duties and responsibilities as well as 

the products and services offered to this business:” Jeff Larson responded, “I have no duties, just 

invested personal money into the opportunity.” 

179. In response to this same directive,” Randy Larson responded, “none.” 

180. In response to the directive, “Provide the date this activity began:” Jeff Larson 

responded “04/15/2019.” 

181. In response to this same directive, Randy Larson responded, “04/01/2019.”   

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182. Following FINRA’s examination, Chung interviewed each of the Arete 

Representatives about Zona.  

183. A review by Chung (or anyone else in Arete’s compliance department) of the 

Arete Representatives’ email in November 2019 would have uncovered dozens of emails about 

Zona with Arete clients or customers or others, notwithstanding the Arete Representatives’ 

efforts to keep these communications off Arete’s email system, as alleged above.    

184. Chung did not contact any Arete customers or clients to whom the Arete 

Representatives had recommended Zona. 

185.  On November 1, 2019, Chung informed each of the Arete Representatives by 

letter (in three separate letters) that he was placing them on heightened supervision.   

186. In each of his letters to the Arete Representatives, Chung wrote: 

You had previously verbally informed me about your intention to 
personally invest in Zona stock but you were instructed not to introduce 
this security to any Arete clients since this oil and gas investment was so 
speculative…. FINRA rules do not permit the recommendation of 
securities away from the firm. 

187. Chung’s letter to Miller addressed certain emails in which Miller discussed Zona 

with Arete clients. Chung wrote:  

Based my conversations with you regarding this incident, I have 
concluded that you discussed the investment with two close, longtime 
friends who are also clients of the firm…. I understand that you did not 
receive any remuneration of any sort if your friends actually invested 
in Zona. 

188. By November 1, 2019, Miller had in fact solicited at least 50 of his customers and 

clients to invest in Zona, most of whom had paid $2.50 per share, and Miller had received 

480,000 shares of Zona at $0.50 or $1.00 per share.  

189. In his November 1, 2019, letter to Jeff Larson, Chung wrote:  

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As you know, FINRA has detected an April 17, 2019 email you sent to 
one of your clients, [the] Camp, via your personal email account where 
you appeared to have recommended an unapproved security product called 
Zona…. Based my [sic] conversations with you regarding this incident, I 
have concluded that you genuinely intended to perform a charitable act by 
introducing the stock to your client and that you in no way stood to gain 
any financial gain by doing so. 

190. By November 1, 2019, Jeff Larson had in fact solicited at least 30 clients for 

Zona, most of whom had paid $2.50 per share, and Jeff Larson had received 679,864 Zona shares 

at either $0.50 or $1.00 per share.  

191. In his November 1, 2019, letter to Randy Larson, Chung addressed certain emails 

that FINRA had detected in which Randy Larson had discussed Zona with clients, and 

Chung wrote:  

Based on my conversations with you regarding this incident, I have 
concluded that you discussed the investment with several close, longtime 
friends who are also clients of the firm. I understand that you discussed 
Zona with your friends in casual social settings when they prompted you 
to discuss your personal investments.  

192. By November 1, 2019, Randy Larson had in fact solicited at least 15 clients to 

invest in Zona, all of whom had paid $2.50 per share. 

193. Chung told the Arete Representatives that they would be assessed heightened 

supervision fees of $5,000 per month effective November 15, 2019, which he explained in a 

November 5, 2019 email to Randy Larson was “designed to provide us with a very thin cushion 

should we be dragged into an arbitration.” 

194. According to Arete’s Procedures, heightened supervision measures could include 

a daily review of activity, frequent contact with customers by the supervisor, pre-approval of all 

communications, and attendance in an outside training program. 

195. The only one of these measures Chung imposed on the Arete Representatives was 

the requirement to attend an outside training program.   

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196. By December 10, 2019, Chung, Arete’s CCO and Miller’s supervisor, had 

removed Miller’s heightened supervision and told him by email:  

Joey, After our phone call, I am persuaded that heightened supervision is 
unwarranted and no additional measures will be imposed against you. 
Specifically, I am convinced that you did not introduce the investment to 
any investor and any of your clients who ultimately decided to invest did 
so based on knowledge obtained from sources other than you.  

V. An Anonymous Email Reveals Sterritt’s Alias and Prior Criminal Conviction to the 
Arete Representatives, Zona Investors, and Chung.  

197. On or around January 19, 2020, the Arete Representatives (along with at least 

some other Zona investors) received an anonymous email stating that “Richard Richman” was an 

alias of Sterritt, that he had federal convictions for conspiracy to commit securities fraud and 

filing false tax returns, and that he had served several years in prison. The email accused Sterritt 

of “business catfishing” in connection with Zona by creating a fake identify to target victims for 

deception or fraud. 

198. The day he received this email (the “Catfishing Email”), Jeff Larson called 

Sterritt to alert him to it and to warn him of the inevitable ensuing investor alarm. 

199. During the call (which Sterritt recorded), Sterritt told Jeff Larson that he had 

changed his name eight or nine years prior, previously pleaded guilty to fraud, and spent time 

in prison. 

200. Jeff Larson asked Sterritt to figure out how to “get ahead” of the allegations.  

201. Jeff Larson advised Sterritt to “fight fire with fire,” issue press releases, make 

public statements, distinguish Zona from his prior dealings, and have someone credible vouch 

for Zona to “shut down the fears.” 

202. Sterritt assured Jeff Larson that he would do so. 

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203. During the call, Jeff Larson, concerned that the Catfishing Email would be sent to 

his work email account, told Sterritt: 

[I]f one person on our group at the front end of this deal decides to 
forward that email to my – my work [inaudible] – which I’m sure 
somebody will because they’re all dummies – somebody will do it, now 
it’s in – on my work email. Now I’m – which is completely regulated 
right now.  

204. On January 27, 2020, Chung received a copy of the Catfishing email from another 

Arete representative—not Miller, Jeff Larson or Randy Larson.  

205. After learning of the Catfishing Email, Chung reported to a Commission staff 

member that he had received an email indicating that Zona appeared to be a fraud.  

206. Chung did not tell the Commission staff that the Arete Representatives had 

previously sold Zona to investors or that he had placed them on heightened supervision as 

a result.  

VI. Miller and Jeff Larson Continue At Least to Assist Their Clients                                              
in Purchasing More Zona Shares.  

207. By February 6, 2020, Zona had completed its one-for-one exchange with ERF, 

and Zona was offering additional shares of ERF for $1 per share.  

208. On that date, the Arete Representatives each received 250,000 ERF shares they 

had purchased at only $0.04 per share.  

209. Meanwhile, from February 6 through May 6, 2020, at least 31 of the investors 

whom the Arete Representatives had previously solicited to invest in Zona again invested in 

Zona, now ERF, at $1 per share.  

210. None of the Arete Representatives informed their clients that they had purchased 

shares at a lower price than their clients had paid.   

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211. On March 5, 2020, Jeff Larson texted one of his advisory clients with instructions 

to contact Mathews and wrote, “Rich [Sterritt] confirmed $1/share.”  

212. On March 17, 2020, the client invested $400,000 in Zona (ERF), and, on May 6, 

2020, an additional $100,000.   

213. On March 9, 2020, Miller texted Mathews that two of his clients wanted “to put 

10k in at 1 a share they will call.”  

214. Mathews responded to Miller by text, “She just called. She wants to put in $25k. 

At $1.00 per share.”  

215. Miller responded, “Yup. Let’s get docs out ASAP,” and Mathews replied, “On it.” 

216. The next month, on April 24, 2020, Jeff Larson texted Mathews and asked her to 

connect with one of his investors, who wanted to purchase more Zona (ERF) shares.   

217. These 31 investors also lost nearly all of their money. 

VII. The Commission Files a Complaint Against Sterritt and Others, Which References 
the Arete Representatives’ Role in Selling Zona Shares.  

218. On April 8, 2021, a FINRA representative requested that Chung provide a list of 

customers of Randy Larson, Jeff Larson, or any other Arete Wealth clients whom “the firm 

believes invested in Zona Energy, along with the dates and amount of each such investment.” 

219. On April 14, 2021, the Commission filed a complaint in the Eastern District of 

New York charging Sterritt and six others with defrauding investors and engaging in market 

manipulation in connection with the Zona fraud.  

220. The same day, the Commission issued a press release about the complaint. 

221. Without naming the Arete Representatives, the complaint alleged:  

Sterritt and Pittman became acquainted with three dually-registered 
investment adviser individuals/registered representatives at a dually-
registered investment adviser/broker-dealer firm, and, in exchange for 
their commitment to raise at least $3 million, allowed the representatives 

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to buy Zona shares for as little as $0.04/share, compared with the 
$1.00/share or $2.50/share price typically offered to other investors. 

222. On that same day, the U.S. Attorney’s Office for the Eastern District of New York 

filed an indictment charging five defendants, including Sterritt, with conspiracy to commit 

securities fraud, wire fraud, and money laundering, among other offenses, in connection with the 

Zona fraud. 

223. Also on April 14, 2021, a FINRA representative forwarded the Commission’s 

press release to Chung with a cover email requesting certain information about Zona:  

Bob, below is a SEC press release. I presume that Arete confirmed that no 
one other than Jeff Larson, Randy Larson [and two other Arete 
representatives] had any involvement with Zona Energy? Please send me 
an email confirming it. In addition, please let me know if Joey Miller 
brought Zona to the attention of investors. 

224. On April 16, 2021, in response to FINRA’s request earlier that month, Chung 

instructed Arete personnel to cross-reference public over-the-counter market disclosures listing 

investors in Zona with lists of Arete customers and clients.  

225. Chung received a copy of the list later that day.   

226. From the list, Arete personnel identified approximately 150 Arete clients who had 

invested in Zona, 120 of whom were clients or customers of one of the Arete Representatives.  

227. The list showed that approximately 60 of Miller’s clients or customers had 

invested in Zona.  

228. The list showed that approximately 40 of Jeff Larson’s clients or customers had 

invested in Zona. 

229. The list showed that approximately 20 of Randy Larson’s clients or customers had 

invested in Zona.  

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230. Neither Chung, not anyone else in Arete’s compliance department, contacted any 

Arete clients regarding any Arete representatives’ involvement, including the Arete 

Representatives’ involvement, with their Zona investments. 

231. On April 22, 2022, Chung provided the list to a senior director at FINRA.  

232. In his letter accompanying the list, Chung claimed: “As we have previously 

discussed, Arete does not have business records related to Zona investments made by any of 

our clients.” 

VIII. Chung and the Arete Representatives Procure Releases, Containing Material 
Misrepresentations and Omissions and Unlawful Liability Waivers, from Clients.   
 
A. Arete Demands That the Arete Representatives Obtain Liability Releases 

from Arete Clients and Customers, and Chung Helps Lead the Effort.  
 

233. Arete Wealth’s Procedures dated January 25, 2021, prohibited a firm 

representative from making any payment to Arete Wealth customers to resolve an error or 

customer complaint without express authorization from Arete. 

234. The same Procedures also made clear that “[t]he CCO and/or the CEO…is 

responsible for reviewing preliminary drafts of settlement agreements prior to execution by a 

customer (current or former)” and for “determining that the terms and conditions are reasonable, 

in accordance to just and equitable principles of trade, compliant with applicable state 

regulations, and do not contain any impermissible confidentiality provisions, complaint 

withdrawal provisions, or require the customer to repudiate or contradict prior claims 

or complaints.” 

235. In approximately the end of April 2021, Arete’s CEO convened a conference call 

with the Arete Representatives, their individual counsel, Chung, and other members of 

Arete’s management.   

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236. Addressing the Arete Representatives, Arete’s CEO chastised them on the call for 

involving Arete customers and clients with Zona and told them: “You came into my living room 

and took a giant [expletive] on my rug.”   

237. Arete’s CEO demanded that the Arete Representatives hire and pay for an outside 

law firm to draft settlement agreements releasing Arete from liability and that the Arete 

Representatives ask their Arete customers and clients who had invested in Zona to sign 

those releases.   

238. Arete’s CEO delegated oversight of the releases to Chung, who worked with the 

Arete Representatives’ counsel.   

239. As Arete’s CCO and the Arete officer to whom Arete’s CEO had delegated 

oversight of the releases, Chung was responsible for reviewing the releases before Arete’s 

customers and clients signed them.   

240. Beginning on April 27, 2023, Chung participated with the Arete Representatives’ 

individual counsel in numerous phone calls and emails regarding the releases.  

241. Chung took an active role in shaping the contents of the releases.  

242. Chung instructed the Arete Representatives to include a clause in each release 

claiming that the Arete customer or client had not made his or her Zona investment through the 

recommendation of an Arete representative. 

243. Chung directed the Arete Representatives to pay customers and clients out of 

pocket for signing the releases. 

244. As directed, the Arete Representatives sought to have their advisory clients who 

had invested in Zona sign the liability releases in return for payments.  

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245. While Arete and the Arete Representatives sought releases from their advisory 

clients, Arete and the Arete Representatives continued to act as their clients’ investment advisers 

and therefore continued to owe them a fiduciary duty.   

246. Meanwhile, on May 9, 2021, Arete’s CEO sent Chung and Arete’s chief operating 

officer a concerned email: “Heads up: I am worried that Jeff Larson’s biggest clients may be 

possibly gearing up for litigation against him and/ or us.” 

247. On the face of each release, the only parties to each release were ostensibly the 

Arete customer or client, on the one hand, and the relevant Arete Representative, on the 

other hand.  

248. The Arete Representatives counter-signed the releases for each of their 

respective clients.  

B. The Releases Contain Material Misrepresentations and Omissions, as Chung 
and the Arete Representatives Know.  

249. Each of the releases falsely claimed that the relevant Arete customer or client who 

had invested in Zona “understood that [the relevant one of Miller, Jeff Larson, or Randy Larson] 

was not recommending an investment in Zona Energy, Inc. nor was [he] acting as a financial 

adviser to INVESTOR” regarding the investors’ purchases in Zona.  

250. The releases Miller’s and Jeff Larson’s clients signed disclosed—as Miller and 

Jeff Larson had not done when they solicited their clients to invest in Zona stock—that Miller 

and Jeff Larson had paid less for Zona shares than the investors whom they had solicited: 

“INVESTOR is also aware that [Miller or Jeff Larson] purchased some shares in Zona at a price 

per share less than INVESTOR paid, however, INVESTOR did not consider or ask what 

[Representative] paid in making the decision to purchase.” 

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251. The releases did not disclose that Miller and Jeff Larson received discounted Zona 

shares in return for agreeing to raise and in fact raising millions of dollars for Zona from 

investors, including their Arete customers and clients. 

C. The Releases Unlawfully Purport to Release Arete from the Fiduciary  
Duty It Owed Its Advisory Clients, as Chung Knows or At Least Recklessly 
or Negligently Disregards.  

 
252. The federal securities laws prohibit investment advisers from contracting to waive 

the fiduciary duties that they owe their clients.  

253. As the general counsel and CCO for a registered Commission broker-dealer and 

investment adviser, Chung knew or at least recklessly or negligently disregarded this prohibition.  

254. Most of the Releases contained broad language that purported to waive all 

claims—not just those related to Zona—against both Arete Wealth and Arete Advisors.  

255. Most of the Releases stated in relevant part:  

Mutual Release. In consideration of the Parties’ mutual desire to avoid litigation, and 
other good and valuable consideration, the receipt and sufficiency of which is hereby 
acknowledged, INVESTOR, on the one hand, hereby releases [the relevant Arete 
Representative], Arete Wealth Advisors, LLC, Arete Wealth Management, LLC, and 
each of their past, present and future agents, representatives, shareholders, members, 
managers, principals, attorneys, affiliates, parent corporations, subsidiaries, officers, 
directors, employees, predecessors and successors and heirs, executors and assigns, from 
any and all legal, equitable or other claims, counterclaims, demands, setoffs, defenses, 
contracts, accounts, suits, debts, agreements, actions, causes of action, sums of money, 
reckoning, damages, judgments, findings, controversies and disputes, and any past, 
present or future duties, responsibilities, or obligations, whether known or unknown, 
including, but not limited to, those claims that may arise relating to Zona Energy, Inc. 

256. This language purported to broadly limit Arete Advisors’ liability by representing 

that the client was waiving “any and all” claims—not just those related to Zona—including 

claims arising out of gross negligence, willful misconduct, and even fraud on the investment 

adviser’s part.  

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257. This language also purported to relieve Arete Advisors of “any past, present or 

future duties,” including an adviser’s fiduciary duties to its clients.  

D. Arete Clients Typically Signed the Releases in Return for $5,000 or Less  
in Compensation.  

258. The amounts the Arete Representatives paid advisory clients to sign the releases 

ranged from $1, in the case of two of Randy Larson’s clients, to $100,000, in the case of one of 

Jeff Larson’s clients.  

259. In 91 of the approximately 103 releases signed by Arete customers and/or clients, 

including customers and clients of the Arete Representatives, the relevant Arete representative 

paid his client or customer $5,000 or less, an amount that generally was significantly lower than 

the amount the client or customer had invested in Zona stock. 

260. Chung collected and catalogued the Arete clients’ and customers’ executed 

releases to track how many of them signed the releases.   

261. During the tracking process, Chung learned that one of Randy Larson’s clients 

had refused to sign the settlement agreement.  

262. Chung told Randy Larson that he did not need to continue to pursue that 

client’s signature. 

263. By the end of September 2021, the Arete Representatives had paid approximately 

$650,000 in consideration to their customers and clients in exchange for their waiving claims 

relating to millions of dollars in purchases of Zona stock.   

IX. Even After the Commission Staff Warned Him, Chung Failed to Implement 
Adequate Compliance Policies and Procedures for Arete Advisors for Years.  

264. As Arete Advisors’ CCO, Chung was responsible for the firm’s compliance 

policies and procedures during the Relevant Period. 

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265. The firm’s compliance policies and procedures originated from an outside 

consulting firm.   

266. On November 26, 2018, the Commission’s Division of Examinations (“Exams”) 

issued a deficiency letter (the “Deficiency Letter”) to Arete Advisors, addressed to Chung and 

Arete’s CEO, and informed them that Arete Advisors’ “Compliance Manual does not reflect 

many of Registrant’s [Arete Advisors’] actual business practices with respect to its investment 

advisory business.”   

267. In its Deficiency Letter, Exams notified Arete Advisors of Exams’ conclusion that 

the firm had violated Advisers Act Rule 206-(4)(7)(a) by failing to adopt policies and procedures 

on topics such as “the purchase of alternative investments for its advisory clients, the factors 

considered, whether the purchase should be made in an advisory or brokerage account, and the 

disclosures made.”  

268. The Deficiency Letter further found that “the various sections of the Compliance 

Manual have not been updated since June 4, 2012, or October 4, 2013. It appears that Registrant 

did not review the adequacy of its compliance policies and procedures annually.”  

269. The Deficiency Letter notified Arete Advisors that Exams had concluded that the 

“Registrant’s [Arete Advisors’] inadequate annual compliance reviews violate Rule 206(4)-7 

under the Advisers Act and are inconsistent with the Compliance Manual. Registrant’s failure to 

conduct adequate annual compliance reviews indicates a lack of diligence by management which 

impairs the effectiveness of Registrant’s compliance program.” 

270. On December 21, 2018, Chung wrote a response letter to Exams on behalf of 

Arete Advisors (the “Response Letter”) and promised to add those topics to the compliance 

manual and to “revise [Arete Advisors’] Compliance Manual to reflect its actual 

business practices.”   

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271. In his Response Letter, Chung further represented to Exams that “Arete is in the 

process of reviewing and updating its Compliance manual, and will ensure it conducts annual 

reviews of its adequacy thereafter.”  

272. Chung’s Response Letter also promised that “Arete will further undertake to 

review the adequacy of its compliance policies and procedures annually.” 

273. Chung’s Response Letter further represented that “Arete is in the process of 

conducting a comprehensive review of its policies and procedures and will make all necessary 

amendments to its Compliance Manual to ensure that it is current and consistent with the 

Advisers Act.” 

274. In subsequent years, Arete Advisors’ senior director of compliance asked Chung 

multiple times to review and approve a new version of the compliance manual, to no avail.  

275. For example, in an October 20, 2020 email to Chung, nearly two years after 

Chung had sent the Response Letter to Exams, the senior director of compliance wrote to Chung 

and Arete’s associate general counsel, “Just a reminder that we need to finish our RIA [registered 

investment adviser] WSPs [Procedures] so I can push them out to the field. Please let me know 

your comments when you have a moment.”   

276. In April 2021, the senior director of compliance sent an email marked “High 

Importance” to Chung and Arete Advisors’ associate general counsel and wrote:  

We are currently running our [registered investment adviser] on 2016 
procedures. Please find the attached up to date version. There are notes 
and comments throughout that need to be addressed before this can be 
rolled out to the field. Please review this as soon as possible.   

277. The following year, on February 16, 2022, the senior director of compliance sent 

yet another email marked “High Importance” to Chung and Arete Advisors’ associate general 

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counsel and wrote: “We need to address the Arete Wealth Advisors WSP’s [Procedures] (noted 

copy attached). . . . Can we make time this week to address it?”   

278. Approximately one year later, on February 17, 2023, the Commission sent a 

subpoena to Arete Wealth and Arete Advisors in connection with its investigation into Zona 

requesting, among other things, documents sufficient to identify certain of Arete’s policies and 

procedures. 

279. Between approximately December 2018 and May 2023, Arete Advisors and 

Chung did not conduct annual reviews of the adequacy of the firm’s compliance policies and 

procedures and the effectiveness of its implementation. 

280. Between approximately December 2018 and May 2023, Arete Advisors and 

Chung failed to tailor the firm’s compliance manual to accurately describe Arete’s business 

or operations.   

281. Arete Advisors did not add the topics referenced in the Deficiency Letter to the 

firm’s compliance manual and disseminate a revised manual to its employees until May 2023, 

approximately four and a half years after Chung had sent his Response Letter to Exams.  

X. Arete Wealth Violated Recordkeeping Requirements,  
and the Arete Representatives Aided and Abetted These Violations.  

 
282. Despite the requirements of Exchange Act Rule 17a-4(b)(4) and the Arete Wealth 

Procedures, Arete personnel—including the firm’s CEO and the Arete Representatives—used 

their personal phones to text about Arete Wealth’s business in a practice that was widespread at 

the firm from at least January 2019.    

283. For example, Arete’s CEO texted the Arete Representatives, Chung, and Arete’s 

chief financial officer (“CFO”) approximately 1,380 times between September 2018 and 

July 2023.  

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284. Even after Arete received a July 10, 2020 document request from the Commission 

staff and a February 17, 2023 subpoena from the Commission staff, Arete’s CEO continued to 

have an auto-delete function enabled on his personal phone until approximately May 2024, and 

Arete failed to retain any of his messages. 

285. Arete’s CEO encouraged the use of texting over personal devices. When a new 

registered representative joined Arete, Arete’s CEO used his personal phone to text the 

representative: “Text me with anything you need or anything you need fixed etc. You can text 

me or call me 24/7.”  

286. Chung and Arete’s CFO each included their personal cell phone numbers in their 

signature blocks on their work email accounts as late as March 2024. 

287. On many occasions beginning by at least 2019—just ten examples of which are 

described below—Arete Wealth personnel, including the Arete Representatives, sent and 

received text messages from their personal phones concerning Arete Wealth’s broker-

dealer business. 

288. On January 24, 2019, Miller exchanged texts with Arete’s managing director of 

capital markets concerning a selling agreement for an investment to be offered to Arete 

customers. 

289. On November 10, 2020, Jeff Larson texted Miller concerning distributions from 

an investment sold to Arete customers, asking, “Do you anticipate any more [the investment’s] 

MC Distributions this year?  If not, I’m going to start sweeping my cash accounts to [another 

investment] if the[y] are under 20k.” 

290. On December 1, 2020, Jeff Larson texted Miller and a new Arete registered 

representative to introduce Miller to the new representative, wrote that she was “looking for 1m 

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of allocation” of an investment, and noted that “[s]he will rip [an investment offered to Arete 

customers], you’ll get love.” 

291. On December 8, 2020, Jeff Larson texted Arete’s CEO and Randy Larson about 

the performance of a new Arete registered representative: “[The new registered representative] is 

billing on -25M and already has 1.25M of alt tickets in compliance review. She just started doing 

mtgs with her client and expects that number to grow. Before mtgs, she shows us the client and 

randy and I help her strategize the alternatives.”  

292. Arete’s CEO responded to the text with a thumbs-up emoji. 

293. On February 25, 2021, Miller texted Jeff Larson, Randy Larson, and two other 

Arete registered representatives about their fundraising efforts for an investment, wrote that there 

were “2 deals in 60 days selling in [fund] 15,” and instructed the text participants to “[l]ook at 

your paycheck. You should have 2 backend checks on it[.]” 

294. On March 2, 2021, Miller and Jeff Larson exchanged texts discussing whether 

Arete had approved certain investments to offer to their customers.   

295. On March 27, 2021, Miller, Randy Larson, Jeff Larson, and another Arete 

registered representative exchanged texts concerning whether they would need help fundraising 

for an investment offered to Arete customers. Randy wrote, “[W]e have a ton coming but it takes 

about 6 weeks to get flow after we start reviesw . . . we just got to week 8 so steady flow is 

on now[.]” 

296. On March 31 and April 9, 2021, Jeff Larson texted a customer concerning the 

close of a deal and the quantity of funds to be distributed to the customer at closing. 

297. In testimony before the Commission staff, Jeff Larson stated that Arete had 

policies concerning text messaging, “[t]hat you can’t text message.” 

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298. Arete Wealth did not retain or preserve most of the written communications 

concerning Arete’s business that its personnel sent from their personal phones. 

TOLLING AGREEMENTS 

299. Arete and the SEC entered into tolling agreements and extensions suspending the 

running of any applicable statute of limitations from March 13, 2023, through September 13, 

2023, from September 13, 2023, through March 13, 2024, from March 13, 2024, through 

September 13, 2024, and from September 13, 2024, through March 13, 2025.  

300. Miller and the SEC entered into tolling agreements and extensions suspending the 

running of any applicable statute of limitations from March 14, 2023, through September 14, 

2023, from September 14, 2023, through March 14, 2024, from March 14, 2024, through 

September 14, 2024, and from September 14, 2024, through March 14, 2025. 

301. Jeff Larson and the SEC entered into tolling agreements and extensions 

suspecting the running of any applicable statute of limitations from March 23, 2023, through 

September 23, 2023, from September 23, 2023, through March 23, 2024, from March 23, 2024, 

through September 23, 2024, and from September 23, 2024, through March 23, 2025. 

302. Randy Larson and the SEC entered into tolling agreements and extensions 

suspending the running of any applicable statute of limitations from May 23, 2023, through 

September 1, 2023, from September 1, 2023, through March 1, 2024, from March 1, 2024, 

through September 1, 2024, and from September 1, 2024, through March 1, 2025. 

303. Chung and the SEC entered into tolling agreements and extensions suspending the 

running of any applicable statute of limitations from March 13, 2023, through September 13, 

2023, from September 13, 2023, through March 13, 2024, and from March 13, 2024, through 

September 13, 2024.  

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FIRST CLAIM FOR RELIEF 
Violations of Exchange Act Section 10(b) and Rule 10b-5 Thereunder 

(Miller and Jeff Larson) 
 

304. The Commission realleges and incorporates by reference paragraphs 1 through 

10, 16 through 43, 53 through 174, 176, 178, 180, 182 through 232, 299 through 303 as though 

fully set forth herein. 

305. Miller and Jeff Larson, directly or indirectly, singly or in concert, in connection 

with the purchase or sale of securities and by the use of means or instrumentalities of interstate 

commerce, or the mails, or the facilities of a national securities exchange, knowingly or 

recklessly have (i) employed one or more devices, schemes, or artifices to defraud, (ii) made one 

or more untrue statements of a material fact or omitted to state one or more material facts 

necessary in order to make the statements made, in light of the circumstances under which they 

were made, not misleading, and/or (iii) engaged in one or more acts, practices, or courses of 

business which operated or would operate as a fraud or deceit upon other persons. 

306. By reason of the foregoing, Miller and Jeff Larson, directly or indirectly, singly or 

in concert, have violated and, unless enjoined, will again violate Exchange Act Section 10(b) [15 

U.S.C. § 78j(b)] and Rule 10b-5 thereunder [17 C.F.R. § 240.10b-5].  

SECOND CLAIM FOR RELIEF 
Violations of Securities Act Section 17(a) 

(Miller and Jeff Larson) 
 

307. The Commission realleges and incorporates by reference paragraphs 1 through 

10, 15 through 43, 53 through 174, 176, 178, 180, 182 through 232, 299 through 303 as though 

fully set forth herein. 

308. Miller and Jeff Larson directly or indirectly, singly or in concert, in the offer or 

sale of securities and by the use of the means or instruments of transportation or communication 

in interstate commerce or the mails, (1) knowingly or recklessly have employed a device, scheme 

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or artifice to defraud, (2) knowingly, recklessly, or negligently have obtained money or property 

by means of untrue statements of a material fact or omissions of a material fact necessary in 

order to make the statements made, in light of the circumstances under which they were made, 

not misleading, or (3) knowingly or recklessly have engaged in a transaction, practice, or course 

of business which operated as a fraud or deceit upon the purchaser. 

309. By reason of the foregoing, Miller and Jeff Larson, directly or indirectly, singly or 

in concert, have violated and, unless enjoined, will again violate Securities Act Section 17(a) [15 

U.S.C. § 77q(a)]. 

THIRD CLAIM FOR RELIEF 
Violations of Advisers Act Sections 206(1) and 206(2)  

(Arete Advisors, Miller, Jeff Larson, and Randy Larson) 
 

310. The Commission realleges and incorporates, as though fully set forth herein, 

paragraphs 1 through 13, 16 through 49, 69 through 174, 176, 178, 180, 182 through 251, 258 

through 263, 299 through 303 as to Miller and Jeff Larson; paragraph 1 through 13, 16 through 

49, 69 through 172, 175, 177, 179, 181, 182 through 251, 258 through 263, 299 through 303 as 

to Randy Larson; paragraphs 1 through 13, 16 through 49, 69 through 252, 258 through 263, 299 

through 303 as to Arete Advisors’ violations of Advisers Act Section 206(1); paragraphs 1 

through 13, 16 through 49, 69 through 263, 299 through 303 as to Arete Advisors’ violations of 

Advisers Act Section 206(2).  

311. Arete Advisors, Miller, Jeff Larson, and Randy Larson, directly or indirectly, 

while acting as investment advisers, by use of the mails or the means and instrumentalities of 

interstate commerce, have: (i) knowingly or recklessly employed devices, schemes, or artifices to 

defraud clients or prospective clients, and/or (ii) knowingly, recklessly, or negligently engaged in 

transactions, practices, and courses of business which operated or would have operated as a fraud 

or deceit upon clients or prospective clients. 

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312. By reason of the foregoing, Arete Advisors, Miller, Jeff Larson, and Randy 

Larson, directly or indirectly, singly or in concert, have violated and, unless enjoined, will again 

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

FOURTH CLAIM FOR RELIEF 
Aiding and Abetting Violations of Advisers Act Sections 206(1) and 206(2) 

(Miller, Jeff Larson, Randy Larson, and Chung) 
 

313. The Commission realleges and incorporates by reference paragraphs 1 through 

13, 16 through 49, 69 through 174, 176, 178, 180, 182 through 251, 258 through 263, 299 

through 303 as to Miller and Jeff Larson; paragraphs 1 through 13, 16 through 49, 69 through 

172, 175, 177, 179, 181, 182 through 251, 258 through 263, 299 through 303 as to Randy 

Larson; 1 through 13, 16 through 49, 69 through 252, 258 through 263, 299 through 303 as to 

Chung as though fully set forth herein.  

314. Arete Advisors, Miller, Jeff Larson, and Randy Larson, directly or indirectly, 

while acting as investment advisers, by use of the mails or the means and instrumentalities of 

interstate commerce, have: (i) knowingly or recklessly employed devices, schemes, or artifices to 

defraud clients or prospective clients, and/or (ii) knowingly, recklessly, or negligently engaged in 

transactions, practices, and courses of business which operated or would have operated as a fraud 

or deceit upon clients or prospective clients. 

315. By reason of the foregoing, Miller, Jeff Larson, and Randy Larson, directly or 

indirectly, singly or in concert, aided and abetted Arete Advisors’ violations of Advisers Act 

Sections 206(1) and (2) [15 U.S.C. §§ 80b- 6(1) and 80b-6(2)] by knowingly or recklessly 

providing substantial assistance to Arete Advisors’ violations, and Chung, directly or indirectly, 

singly or in concert, aided and abetted Arete Advisors’, Miller’s, Jeff Larson’s, and/or Randy 

Larson’s violations of Advisers Act Sections 206(1) and (2) [15 U.S.C. §§ 80b- 6(1) and 80b-

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6(2)] by knowingly or recklessly providing substantial assistance to Arete Advisors’, Miller’s, 

Jeff Larson’s, and/or Randy Larsons’ violations.  

FIFTH CLAIM FOR RELIEF 
Violations of Section 15(a) of the Exchange Act  

(Miller, Randy Larson, and Jeff Larson) 

316. The Commission realleges and incorporates by reference paragraphs 1 through 

13, 15 through 43, 53 through 232, 299 through 303, as though fully set forth herein. 

317. Miller, Randy Larson, and Jeff Larson each acted as brokers within the meaning 

of Section 3(a)(4) of the Exchange Act [15 U.S.C. §78c(4)] by directly or indirectly, by the use 

of the mails or the means of instrumentalities of interstate commerce, effecting transactions in, or 

inducing or attempting to induce the purchase or sale of, Zona stock. 

318. Miller, Randy Larson, and Jeff Larson were not registered with the Commission 

in accordance with Section 15(b) of the Exchange Act [15 U.S.C. § 78o(b)], and their association 

with Arete Wealth did not exempt them from registration for the transactions at issue as such 

transactions were not made in the scope or course of their employment with Arete Wealth. 

319. By reason of the conduct described above, Miller, Randy Larson, and Jeff Larson, 

directly or indirectly, violated and, unless enjoined will again violate, Exchange Act Section 

15(a) [15 U.S.C. § 78o(a)]. 

SIXTH CLAIM FOR RELIEF 
Violations of Advisers Act Section 206(4) and Rule 206(4)-7 Thereunder  

(Arete Advisors) 
 

320. The Commission realleges and incorporates by reference paragraphs 14, 16 

through 22, 24, 28, 50 through 52, 264 through 281, 299 through 303 as though fully set 

forth herein. 

321. From approximately November 2018 to May 2023, Arete Advisors failed to adopt 

written policies and procedures reasonably designed to prevent Advisers Act violations by the 

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firm and its supervised persons and failed to conduct its required annual review of the adequacy 

of its policies and procedures and the effectiveness of their implementation. 

322. By reason of the foregoing, Arete Advisors, directly or indirectly, violated and 

unless enjoined, will again violate Advisers Act Section 206(4) [15 U.S.C. § 80b-6(4)] and Rule 

206(4)-7 thereunder [17 C.F.R. § 275.206(4)-7].  

SEVENTH CLAIM FOR RELIEF 
Aiding and Abetting Violations of Advisers Act  
Section 206(4) and Rule 206(4)-7 Thereunder  

(Chung) 
 

323. The Commission realleges and incorporates by reference paragraphs 14, 16 

through 22, 24, 28, 50 through 52, 264 through 281 as though fully set forth herein. 

324. From approximately November 2018 to May 2023, Arete Advisors failed to adopt 

written policies and procedures reasonably designed to prevent Advisers Act violations by the 

firm and its supervised persons and failed to conduct its required annual review of the adequacy 

of its policies and procedures and the effectiveness of their implementation. 

325. By reason of the foregoing, Chung, directly or indirectly, singly or in concert, 

aided and abetted Arete Advisors’ violations of 206(4) [15 U.S.C. § 80b-6(4)] and Rule 206(4)-7  

thereunder [17 C.F.R. § 275.206(4)-7] by knowingly or recklessly providing substantial 

assistance to Arete Advisors’ violations. 

EIGHTH CLAIM FOR RELIEF 
Violations of Exchange Act Section 17(a) and Rule 17a-4(b)(4) Thereunder  

(Arete Wealth) 
 

326. The Commission realleges and incorporates by reference paragraphs 14, 16 

through 23, 25 through 28, 53 through 68, 282 through 298, 299 through 303 as though fully set 

forth herein. 

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327. From approximately January 1, 2019 through May 2024, Arete Wealth failed to 

preserve, for a period of not less than three years, originals of all communications received and 

copies of all communications sent (and any approvals thereof) relating to its business as such. 

328. By reason of the foregoing, Arete Wealth violated directly or indirectly, and 

unless enjoined, will again violate Exchange Act Section 17(a) [15 U.S.C 78q(a)] and             

Rule 17a-4(b)(4) [17 C.F.R. § 240.17a-4(b)(4)] thereunder. 

NINTH CLAIM FOR RELIEF 
Aiding and Abetting Violations of Exchange Act  
Section 17(a) and Rule 17a-4(b)(4) Thereunder 

(Miller, Jeff Larson, and Randy Larson) 
 

329. The Commission realleges and incorporates by reference paragraphs 14, 16 

through 23, 25 through 28, 53 through 68, 282 through 298, 299 through 303 as though fully set 

forth herein. 

330. From approximately January 1, 2019 through May 2024, Arete Wealth failed to 

preserve, for a period of not less than three years, originals of all communications received and 

copies of all communications sent (and any approvals thereof) relating to its business as such. 

331. By reason of the foregoing, Miller, Jeff Larson, and Randy Larson, directly or 

indirectly, singly or in concert, aided and abetted Arete Wealth’s violations of Exchange Act 

Section 17(a) [15 U.S.C 78q(a)] and Rule 17a-4(b)(4) [17 C.F.R. § 240.17a-4(b)(4)] by 

knowingly or recklessly providing substantial assistance to Arete Wealth’s violations.  

  

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PRAYER FOR RELIEF 

WHEREFORE, the Commission respectfully requests that this Court grant the 

following relief: 

I. 

Permanently enjoining Arete Advisors and its officers, agents, servants, employees and 

attorneys and all persons in active concert or participation with any of them from violating, 

directly or indirectly, Advisers Act Sections 206(1), 206(2), and 206(4), and Rule 206(4)-7 

thereunder [17 C.F.R. § 275.206(4)-7)]; 

II. 

Permanently enjoining Arete Wealth and its officers, agents, servants, employees and 

attorneys and all persons in active concert or participation with any of them from violating, 

directly or indirectly, Exchange Act Section 17(a) [15 U.S.C. § 78q(a)] and Rule 17a-4(b)(4) 

thereunder [17 C.F.R. § 240.17a-4-(b)(4)]; 

III. 

Permanently enjoining Miller and his agents, servants, employees and attorneys and all 

persons in active concert or participation with any of them from violating, directly or indirectly, 

Exchange Act Sections 15(a) and 10(b) [15 U.S.C §§ 78o(a) and 78j(b)] and Rule 10b-5 

thereunder [17 C.F.R. § 275.10b-5]; Securities Act Section 17(a) [15 U.S.C. § 77q(a)]; and 

Advisers Act Sections 206(1) and 206(2) [15 U.S.C. §§ 80b-6(1) and 80b-6(2)]; and Exchange 

Act Section 17(a) [15 U.S.C. § 78q(a)] and Rule 17a-4 thereunder [17 C.F.R. § 240.17a-4];         

IV. 

Permanently enjoining Jeff Larson and his agents, servants, employees and attorneys and 

all persons in active concert or participation with any of them from violating, directly or 

indirectly, Exchange Act Sections 15(a) and 10(b) [15 U.S.C §§ 78o(a) and 78j(b)] and Rule 

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10b-5 thereunder [17 C.F.R. § 275.10b-5]; Securities Act Section 17(a) [15 U.S.C. § 77q(a)]; 

Advisers Act Sections 206(1) and 206(2) [15 U.S.C. §§ 80b-6(1) and 80b-6(2)]; and Exchange 

Act Section 17(a) [15 U.S.C. § 78q(a)] and Rule 17a-4 thereunder [17 C.F.R. § 240.17a-4];              

V. 

Permanently enjoining Randy Larson and his agents, servants, employees and attorneys 

and all persons in active concert or participation with any of them from violating, directly or 

indirectly, Exchange Act Section 15(a) [15 U.S.C. § 78o(a)], Advisers Act Sections 206(1) and 

206(2) [15 U.S.C. §§ 80b-6(1) and 80b-6(2)], and Exchange Act Section 17(a) [15 U.S.C. 

§ 78q(a)] and Rule 17a-4 thereunder [17 C.F.R. § 240.17a-4];       

VI. 

Permanently enjoining Chung and his agents, servants, employees and attorneys and all 

persons in active concert or participation with any of them from violating, directly or indirectly 

Advisers Act Sections 206(1), 206(2), and 206(4) [15 U.S.C. § 80b-6(1), 80b-6(2), and 80b-

6(4)], and Rule 206(4)-7 thereunder [17 C.F.R. §§ 275.206(4)-7)]; 

VII. 

Permanently prohibiting Miller, Jeff Larson, and Randy Larson from, directly or 

indirectly, acting as or being associated with any broker, dealer, or investment adviser, pursuant 

to Exchange Act Section 21(d)(5) [15 U.S.C. §78u(d)(5)]. This injunction shall not prevent the 

Arete Representatives from being a customer or client of a broker, dealer, or investment 

adviser. For purposes of this requested injunction, (a) a person is associated with a broker or 

dealer if such person is a partner, officer, director, or branch manager of such broker or dealer (or 

occupies a similar status or performs similar functions), directly or indirectly controls, is 

controlled by, or is under common control with such broker or dealer, or is an employee of such 

broker or dealer; and (b) a person is associated with an investment adviser if such person is a 

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partner, officer, or director of such investment adviser (or performs similar functions), or directly 

or indirectly controls or is controlled by such investment adviser, including any employee of 

such investment adviser; 

VIII. 

Permanently prohibiting Miller, Jeff Larson, and Randy Larson from participating in any 

offering of a penny stock, including engaging in activities with a broker, dealer, or issuer for 

purposes of issuing, trading, or inducing or attempting to induce the purchase or sale of any 

penny stock, under Exchange Act Section 21(d)(6) [15 U.S.C. § 78u(d)(6)];  

IX. 

Permanently prohibiting Miller and Jeff Larson from serving as an officer or director of 

any company that has a class of securities registered under Exchange Act Section 12 [15 U.S.C. 

§ 78l] or that is required to file reports under Exchange Act Section 15(d) [15 U.S.C. § 78o(d)], 

pursuant to Securities Act Section 20(e) [15 U.S.C. § 77t(e)] and Exchange Act Section 21(d)(2) 

[15 U.S.C. § 78u(d)(2)]; 

X. 

Permanently prohibiting Randy Larson from serving as an officer or director of any 

company that has a class of securities registered under Exchange Act Section 12 [15 U.S.C. § 

78l] or that is required to file reports under Exchange Act Section 15(d) [15 U.S.C. § 78o(d)], 

pursuant to Exchange Act Section 21(d)(5) [15 U.S.C. § 78u(d)(5)]; 

XI. 

Ordering Defendants to pay civil money penalties under Securities Act Section 20(d) [15 

U.S.C. § 77t(d)], Exchange Act Section 21(d) [15 U.S.C. § 78u(d)(3)], and Advisers Act Section 

209(e) [15 U.S.C. § 80b-9(e)];  

XII. 

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 Grant such other and further relief as this Court may deem just and proper. 

JURY DEMAND 

The Commission demands a jury in this matter for all claims so triable. 

 
Dated: January 17, 2025 

 
Respectfully submitted, 
 
By: /s/ Eric M. Phillips 
U.S. SECURITIES AND EXCHANGE 
COMMISSION  
175 West Jackson Boulevard, Suite 1450 
Chicago, Illinois 60604 
Telephone: (312) 353-7390 
Facsimile: (312) 353-7398 
Email: [email protected] 
 
Oren Gleich* 
U.S. SECURITIES AND EXCHANGE 
COMMISSION  
100 Pearl Street, Suite 20-100 
New York, NY 10004-2616 
Telephone: (212) 336-0190 
Facsimile: (212) 336-1319 
Email: [email protected] 
 
 
 

* Pro hac vice application forthcoming 

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