UNITED STATES OF AMERICA

Before the

SECURITIES AND EXCHANGE COMMISSION

SECURITIES EXCHANGE ACT OF 1934 

Release No. 93706 / December 2, 2021

ADMINISTRATIVE PROCEEDING 

File No. 3-19494

In the Matter of

HCR Wealth Advisors

Respondent.

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ORDER ESTABLISHING A FAIR 

FUND

On September 23, 2019, the Commission instituted and simultaneously settled this

administrative and cease-and-desist proceeding by issuing the order (the “Order”)1against HCR

Wealth Advisors (“HCR”). In the Order, the Commission found that the Respondent failed to 

reasonably supervise, Jeremy Joseph Drake (“Drake”), formerly an investment adviser 

representative of HCR, and failed to implement reasonable compliance-related policies and 

procedures in response to red flags about Drake’s handling of client accounts. The Order further 

found that from 2012 to July 2016, Drake defrauded two HCR clients, a married couple, out of 

approximately $1.2 million in management fees, approximately $900,000 of which Drake 

received as incentive-based compensation from HCR. During the same period, Drake 

misappropriated a total of over $200,000 from the married couple and two other HCR clients to 

support a struggling restaurant that was majority owned by the married couple and in which 

Drake held a minority ownership interest. 

HCR failed to reasonably supervise Drake and to implement reasonable policies and 

procedures in response to warnings about Drake’s conduct and did not reasonably investigate 

when two clients complained about Drake’s handling of their accounts.

The Order required that the Respondent pay a civil money penalty in the amount of 

$220,000 to the Commission. The Commission further ordered the funds paid pursuant to the 

Order be held pending a decision whether the Commission, in its discretion, would seek to 

distribute the funds or transfer them to the general fund of the U.S. Treasury.

 

1 See Order Instituting Administrative and Cease-and-Desist Proceedings, Pursuant to Sections 203(e) and 203(k) of 

the Investment Advisers Act of 1940, Making Findings, and Imposing Remedial Sanctions and a Cease-and-Desist 

Order, Advisers Act Rel. No. 5361 (Sept. 23, 2019).
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The Respondent has paid in full, and a total of $220,000.00 is currently held in a 

Commission-designated interest-bearing account at the U.S. Department of Treasury’s Bureau of 

the Fiscal Service, pursuant to the Order. 

Three of the four investor victims have been fully compensated; however, there remains 

one uncompensated investor victim. The Division of Enforcement (the “Division”) has

concluded that a distribution is feasible and appropriate. 

The Division now recommends that a Fair Fund be established, pursuant to Section 

308(a) of the Sarbanes-Oxley Act of 2002, so the civil money penalty paid by HCR can be 

distributed to the remaining investor victim.

Accordingly, IT IS HEREBY ORDERED that pursuant to Section 308(a) of the 

Sarbanes-Oxley Act of 2002, a Fair Fund is established so that the civil money penalty paid by 

the Respondent can be distributed to the remaining investor victim.

By the Commission.

Vanessa A. Countryman

Secretary