Investment advisory firm Atlantic Asset Management has been charged with failing to disclose conflicts of interest related to its investment of more than $43 million of client funds in Native American tribal bonds.

The U.S. Securities and Exchange Commission said Tuesday that AAM never disclosed the bond sales would generate a private placement fee for a broker-dealer whose parent company, BFG Socially Responsible Investments, is a part owner of AAM and would be used to purchase an annuity for BFG’s parent.

A civil complaint filed Tuesday in New York federal court accuses AAM of two counts of violating the anti-fraud provision of the Investment Advisers Act.

“Atlantic violated a fundamental duty to its clients by placing its own financial interests ahead of client interests,” Andrew M. Calamari, director of the SEC’s New York regional office, said in a news release. “AAM’s clients should have been informed that the investments in illiquid bonds would financially benefit people with ownership control over AAM.”

According to the complaint, AAM has been unable to find buyers for the bonds and none of its clients has been able to liquidate its position in the bonds. “Recently, a BFG representative informed AAM that there is no market for the bonds and that they cannot be priced,” it said.

Atlantic, formerly known as Hughes Capital Management, manages $11.2 billion in assets, according to an SEC filing. BFG acquired an ownership interest in the firm’s parent company, GMT Duncan, by contributing $8.7 million to GMT’s acquisition of Hughes in July 2014, but allegedly never disclosed the interest in regulatory filings.

Only two weeks after the Hughes acquisition was completed, the SEC said, AAM’s chief investment officer, who had been appointed by BFG, proposed that the firm invest $27 million in tribal bonds. The sale generated a $250,000 fee for the broker-dealer.

In April, AAM invested another $16.5 million in newly issued tribal bonds. By this time, the SEC said, the firm was aware that “there was no active market” for the earlier-issued bonds and had received complaints from clients about the earlier investment.

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