On October 9, 2026, the SEC announced, in Litigation Release No. 26671, consent judgments against SQN Capital Management LLC, a New York investment adviser, and Jeremiah Silkowski, its President, CEO, Chief Compliance Officer, and majority owner. The case, SEC v. Jeremiah Silkowski and SQN Capital Management LLC (S.D.N.Y., No. 1:26-civ-08162), was filed on September 18, and the judgments were entered on October 8. Both defendants consented without admitting or denying the allegations.
What the SEC alleges
According to the SEC, from 2019 through 2025, across four funds, SQN did not have the funds' annual financial statements audited, and did not prepare unaudited statements conforming to GAAP as the funds' governing documents required. The SEC also alleges that Silkowski alone prepared the funds' asset valuations and materially inflated them, while telling investors an independent valuation expert had prepared them. Net asset values were allegedly left unchanged for years regardless of cash flows, market conditions, asset performance, or whether an asset was still held. The SEC further alleges that Silkowski repeatedly told investors liquidation would be completed soon without a reasonable basis, without disclosing market conditions or SQN's lack of resources. Liquidation has run well past the deadlines in the governing documents.
The charges are Sections 206(1) and 206(2) of the Advisers Act for both defendants, Section 206(4) and Rules 206(4)-2 (the custody rule) and 206(4)-7 (the compliance rule) for SQN, and aiding and abetting for Silkowski.
The part that matters most: this was not the first time
The SEC says it previously charged SQN in settled administrative proceedings in 2020 and 2023 for custody and compliance rule violations tied to failing to deliver audited financials, and that Silkowski was charged in the 2023 proceeding. The alleged failures continued. The outcome this time is a sharper set of consequences than the earlier settlements: permanent injunctions for both defendants, a $200,000 civil penalty and a permanent bar from the industry for Silkowski (except as needed to assist the receiver), and a court-appointed receiver to liquidate the funds and distribute net proceeds to investors.
Why it matters beyond one firm
Three lessons stand out for any adviser with private fund clients.
- Audits are a condition, not a courtesy. When fund documents promise audited financials, delivering them is a commitment to investors, and the SEC's earlier 2020 and 2023 proceedings were tied to the same failure.
- Valuation needs a second set of eyes. Valuations prepared by one person, held flat for years, and described to investors as independently prepared are a combination that is hard to defend. Document who values what, how often, and who checks it.
- The CCO role cannot sit entirely with the owner. The SEC describes Silkowski as both CCO and majority owner. A compliance program has little independence when the person responsible for testing the business also runs and owns it. If your CCO has outsized control over the firm, consider outside review or a co-reviewer.
The progression from settled proceedings to court-ordered injunctions to a receivership and a bar is also a useful reminder: in this case, the same alleged failures kept recurring after earlier settlements, and the consequences escalated.
What to do now
Build a tracker for every private fund that shows the fiscal year-end, the audit firm, the delivery deadline under the custody rule or fund documents, and the date the audited financials were actually delivered. Test it quarterly. Then pull a sample of valuations and confirm they changed when the underlying facts changed.
How Compliers Can Help
Independent review of private fund compliance, including audit tracking and valuation governance, is part of our Exam Readiness work, and our Consulting & Staffing team can serve as an outsourced or co-CCO.