On September 13, 2013, the SEC charged Frederick D. Scott, owner of a New York-based investment advisory firm, with defrauding investors and falsely claiming he managed $3.7 billion in assets.  On the same day, in a parallel criminal action brought in the Eastern District of New York, Scott pled guilty to making materially false statements to the SEC during the course of an investigation and conspiring to commit wire fraud.  Scott, who will be sentenced later this year, faces up to five years’ imprisonment on the false statements charge alone.  The joint actions against Scott highlight the government’s commitment to civilly and criminally charging individuals who defraud investors and lie during the course of an SEC examination or investigation.  See “Is This an Inspection or an Investigation? The Blurring Line Between Examinations of and Enforcement Actions Against Private Fund Managers,” Hedge Fund Law Report, Vol. 5, No. 13 (Mar. 29, 2012).  In preparing for investigations, investment advisers must ensure that all personnel who communicate with the SEC are well versed in the potential repercussions of withholding material information or lying to examiners.  This article summarizes the civil and criminal charges against Scott and his subsequent plea deal, based on allegations contained in the SEC complaint, the criminal information and a Debevoise & Plimpton LLP Client Update describing the case and Scott’s plea deal.