According to FINRA, Brian C. Shevland was fined $10,000 and suspended from association with any FINRA member in all capacities for one year for making negligent misrepresentations about the performance of two private equity funds to investors.

Shevland caused the funds he managed to invest more than $20 million (including some of his own money) in a separate Master Fund managed by his former employer. The funds created documents containing materially inaccurate performance results that Shevland distributed to investors on a regular basis. These documents relied on information from the Master Fund, including unaudited financials claiming consistent positive monthly returns and an annual rate of return exceeding 80 percent during one year.

Despite learning of material discrepancies in the financial results reported by the Master Fund, Shevland failed to act with due care. Certain monthly reports did not accurately reflect the funds' investment, yet Shevland did not ask anyone at the Master Fund about these discrepancies or take steps to investigate. Instead, he negligently continued to direct others to use the Master Fund's claimed financial results to create documents distributed to investors, which materially overstated the funds' performance.

Subsequently, the Master Fund's manager was arrested and charged with securities fraud, and the Master Fund is now subject to a receivership with losses to investors yet to be ascertained. Shevland's failure to investigate obvious red flags contributed to investors receiving false performance information that likely influenced their investment decisions.

This case demonstrates the critical importance of due diligence and healthy skepticism when investment returns appear too good to be true. For investors, claims of consistent high returns should always be verified through independent sources, and financial professionals have an obligation to investigate discrepancies rather than simply accepting and distributing potentially fraudulent information.