SECURITIES AND EXCHANGE COMMISSION

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C.

INVESTMENT ADVISERS ACT OF 1940

Release No. 7010 / September 21, 2026

Admin. Proc. File No. 3-21400

In the Matter of

MICHAEL SZTROM and DAVID SZTROM

OPINION OF THE COMMISSION

INVESTMENT ADVISER PROCEEDING

Grounds for Remedial Action

Injunction

Respondents were permanently enjoined from violating the antifraud and recordkeeping

provisions of the federal securities laws. Held, it is in the public interest to bar

respondents from association with any investment adviser, broker, dealer, municipal

securities dealer, municipal advisor, transfer agent, or nationally recognized statistical

rating organization, with one respondent subject to a right to apply for reentry.

APPEARANCES:

Michael J. Rinaldi, Mary P. Hansen, and Michael D. Crosson of Duane Morris LLP for

respondents.

Donald Searles for the Division of Enforcement.

2

On May 2, 2023, the Securities and Exchange Commission instituted an administrative

proceeding against Michael Sztrom and David Sztrom (“Michael” and “David,” respectively

and, collectively, “Respondents”) under Section 203(f) of the Investment Advisers Act of 1940. 1

The Division of Enforcement moves for summary disposition and the imposition of an industry

bar against each Respondent, which Respondents oppose. Based on our review of the filings, we

grant the Division’s motion for summary disposition and bar Respondents from the securities

industry, but provide David Sztrom the right to apply for reentry.

I.

Background

A. Respondents were enjoined under antifraud and recordkeeping provisions of the

securities laws.

On January 15, 2021, the Commission filed a complaint in federal district court for

alleged antifraud violations against Respondents and Sztrom Wealth Management, Inc.

(“SWM”), an unregistered investment adviser that David and Michael both controlled, and

aiding and abetting recordkeeping violations against David. 2 On October 6, 2022, the court

entered agreed judgments against Respondents imposing civil penalties and enjoining them from

further antifraud and recordkeeping violations of the Advisers Act. 3 Respondents also agreed

that they would not contest the civil complaint’s allegations in a subsequent administrative

proceeding like this one.

What follows is drawn from the complaint’s allegations. Michael entered the securities

industry in 1998, when he became associated with various firms, including as an investment

adviser and broker-dealer representative with a large securities firm identified in other public

records as UBS Financial Services Inc. (“UBS”). 4 Sometime around August 2015, Michael

resigned from UBS and sought to move most of his advisory clients to Charles Schwab & Co.

(“Schwab”). Michael learned, however, that FINRA was investigating his conduct while he had

been at UBS and that Schwab and other broker-dealers would not allow him to use their trading

platforms because of the investigation.

Michael therefore contacted a registered investment adviser, Advanced Practice

Advisors, LLC (“APA”), about Respondents’ potentially associating with it. But APA

responded that it would not associate with Michael because of FINRA’s investigation and

because Schwab had prohibited Michael from using its platform. APA informed Michael that it

would associate with only his son, David, who was then in his early twenties and had recently

1

Michael Sztrom, Advisers Act Release No. 6296, 2023 WL 3243514 (May 2, 2023).

2

SEC v. Sztrom, No. 3:21-cv-00086, ECF No. 1 (S.D. Cal. Jan. 15, 2021) (complaint).

3

15 U.S.C. §§ 80b-4, 80b-6; 17 C.F.R. § 275.204-2(a).

4

See Michael Sztrom’s Investment Adviser Public Disclosure (“IAPD”) report,

https://adviserinfo.sec.gov/individual/summary/3042821 (last visited July 28, 2026). We take

official notice of the current IAPD reports for both Michael and David Sztrom. Id.; David

Sztrom’s IAPD report, https://adviserinfo.sec.gov/individual/summary/5978581 (last visited July

28, 2026); see also Rule of Practice 323, 17 C.F.R. § 201.323 (governing official notice).

3

passed a securities licensing exam. David’s prior advisory experience had been about five

months of performing administrative tasks.

Upon David’s association with APA, most of Michael’s advisory clients moved to APA,

where Michael’s clients signed agreements that APA would serve as their investment adviser and

that SWM, in turn, would serve as the clients’ investment adviser representative with APA. At

that time, SWM was solely owned and operated by David. But given David’s lack of

experience, Michael believed that David would be unable to retain or recruit clients if David’s

clients knew that Michael was not also associated with APA. Michael and David therefore

allowed Michael to continue providing their clients investment advice without disclosing that

Michael was not associated with APA.

From November 2015 through March 2018, Michael regularly corresponded with

Respondents’ clients about investment advice, without telling them he was not associated with

APA or that he was prohibited from performing trades in client accounts. Michael also regularly

researched possible investments, made portfolio recommendations to clients, and executed trades

in client accounts. Respondents concealed from their clients that Michael was providing

investment advice to them without being associated with APA and without compliance oversight

by APA or any other entity.

David assisted Michael in advising Respondents’ clients by allowing his father to access

confidential information from the APA system, including client information. David also

circumvented APA’s requirement that all client communications be sent through its approved

systems and devices by using his personal smartphone to text clients about investment advice—

and allowing Michael to similarly use his personal smartphone and his personal email to text and

email clients about investment advice and trades that Michael was making in client accounts.

David knew these communications with clients were not monitored or preserved as APA

required.

APA’s CEO told Respondents to explain their respective roles to their clients.

Respondents claimed that they verbally informed some clients that Michael was not associated

with APA, but Respondents never explained their respective roles in writing, and many clients

continued to believe that Michael was associated with APA.

David provided Michael access to APA’s broker-dealer, Schwab, including by providing

Michael with APA’s master account number. In contacting Schwab, however, Michael

impersonated David and purported to be associated with APA. He did this on at least 38 separate

telephone calls with Schwab, discussing, for example, block trades, trade allocations, and

rebalancing client accounts, sometimes when David was present. Both Michael and David have

admitted under oath that they knew it was wrong for Michael to impersonate David on these

calls.

After discovering Michael’s deception, Schwab immediately terminated David’s access

to its platform and told APA’s clients that Schwab would no longer allow them to use its

brokerage services if the clients continued to use APA as their investment adviser. Respondents,

however, attempted to conceal why Schwab was terminating its relationship with APA. Michael

told one of Respondents’ clients that APA was changing brokers “primarily” because the new

4

broker had “more advanced portfolio management capabilities” and other clients that he had only

impersonated David on a single call.

B.

The Commission instituted this proceeding, and the Division moved for summary

disposition.

After the district court entered the judgment permanently enjoining Respondents, the

Commission instituted this proceeding to determine whether the allegations contained in the

order instituting proceedings were true and if remedial action was appropriate. The Division

now moves for summary disposition and the imposition of industry bars. Respondents oppose

that motion.

II.

A.

Analysis

Summary disposition is appropriate.

Under Rule of Practice 250(b), a motion for summary disposition may be granted if

“there is no genuine issue with regard to any material fact” and the moving party “is entitled to

summary disposition as a matter of law.” 5 Respondents oppose summary disposition and request

a hearing before a hearing officer, asserting that genuine disputes of fact exist about the public

interest factors on which the Division bases its request to bar Respondents. But Respondents do

not raise any genuine issues of material fact.

Respondents ask for an in-person hearing so that they can present the complete

recordings of Michael’s calls with Schwab, which they claim would show that most of the calls

were routine or administrative in nature. But as described above, several of the calls involved

substantive investment activities, and both Michael and David admitted under oath that Michael

impersonated David on the calls and that they knew it was wrong. Assuming that most of the

remaining calls were routine or administrative does not change that. Nor could the full content

of those calls change that, entirely independently of those calls, Respondents made fraudulent

misrepresentations and omissions to their clients about Michael’s role at APA and failed to

preserve client communications. Respondents also do not identify any specific statement that

would raise a genuine issue of material fact. To the extent they believe such statements exist, the

appropriate vehicle was their opposition to summary disposition—not a request for a hearing. 6

Respondents also claim that a hearing officer should be able to “hear directly from

Michael,” but Michael does not explain what live testimony would add to the declaration he

already submitted in this proceeding, nor do the other declarations Respondents have introduced

raise any genuine issue of material fact, as we explain below. We are similarly unpersuaded by

Respondents’ request for a hearing to submit evidence that would allegedly show that APA and

5

6

17 C.F.R. § 201.250(b).

See id. (requiring denial or deferment of motion for summary disposition if a hearing is

necessary to present “facts essential to justify opposition to the motion”); James S. Tagliaferri,

Exchange Act Release No. 80047, 2017 WL 632134, at *7 (Feb. 15, 2017) (“The party opposing

summary disposition may not rely on bare allegations or denials but instead must present specific

facts showing a genuine issue of material fact for resolution at a hearing.” (cleaned up)).

5

Schwab representatives acquiesced in some aspects of Michael’s involvement with APA. As we

also explain below, APA told Respondents that they still had to disclose Michael’s role to

clients. But even assuming acquiescence by APA or Schwab occurred, it does not change our

concerns explained below about Respondents’ prolonged breaches of their fiduciary duties—

which they committed knowingly or recklessly—or the risks Respondents pose to the investing

public.

For these reasons, we find that the Division has satisfied its burden under the summary

disposition standard and that an in-person hearing is unnecessary in this case.

B.

Relief is available under the Advisers Act.

Advisers Act Section 203(f) authorizes the Commission to suspend or bar a person from

the securities industry if it finds, on the record after notice and opportunity for hearing, that

(1) the person is enjoined from any conduct or practice in connection with acting as an

investment adviser; (2) the person was associated with an investment adviser at the time of the

misconduct; and (3) such a sanction is in the public interest. 7 As Respondents concede, the

record establishes the first two elements. Respondents are enjoined from conduct in connection

with acting as investment advisers (i.e., violating Advisers Act Section 206(1) and (2)). 8 And at

the time of the misconduct, David was associated with APA, a registered investment advisor, and

both David and Michael controlled, and therefore were associated with, SWM, an unregistered

investment adviser. 9

C.

Industry bars, with David Sztrom provided a right to apply for reentry, are in the

public interest.

In determining whether any remedial action is in the public interest, we consider the

egregiousness of the respondent’s actions, the isolated or recurrent nature of the infraction, the

degree of scienter involved, the sincerity of the respondent’s assurances against future violations,

the respondent’s recognition of the wrongful nature of their conduct, and the likelihood that the

respondent’s occupation will present opportunities for future violations. 10 Our public interest

7

15 U.S.C. § 80b-3(f) (cross-referencing Advisers Act Section 203(e)(4), 15 U.S.C. § 80b3(e)(4)); see also id. § 80b-3(e)(4) (discussing injunctions).

8

See supra note 3 and accompanying text; Advisers Act Section 206(1)–(2), 15 U.S.C.

§ 80b-6(1)–(2) (making it unlawful for “any investment adviser” to engage in specified conduct);

Albert K. Hu, Advisers Act Release No. 6497, 2023 WL 8469447, at *3 (Dec. 6, 2023) (holding

that respondent “was enjoined from conduct in connection with acting as an investment adviser”

based on injunction against violating Advisers Act Section 206).

9

See Advisers Act Section 202(a)(17), 15 U.S.C. § 80b-2(a)(17) (defining a person

associated with an investment adviser to include “any person directly or indirectly controlling . . .

such investment adviser”).

10

Steadman v. SEC, 603 F.2d 1126, 1140 (5th Cir. 1979), aff’d on other grounds, 450 U.S.

91 (1981); see also SEC v. Bankosky, 716 F.3d 45, 49 (2d Cir. 2013) (describing Steadman

factors as “suggestive and non-exclusive indicators of unfitness to serve as a fiduciary”).

6

inquiry is flexible, and no one factor is dispositive. 11 The remedy is intended to protect the

investing public from harm, not to punish the respondent. 12 We have considered all the above

factors and find that industry bars are warranted to protect the investing public, while allowing

David to apply for reentry.

1.

Respondents’ misconduct was egregious, recurrent, and done with scienter.

There is no genuine issue of any material fact that Respondents’ misconduct was

egregious and recurrent. The district court proceedings established that, for more than two years,

Respondents breached their fiduciary duties as investment advisers by fraudulently misleading

their clients into believing that Michael was associated with APA. 13 Respondents did this by,

among other things, having Michael regularly communicate with their clients about investment

advice and informing clients about Michael’s trades in their accounts. Respondents also claimed

on SWM’s website that the “team” had more than thirty-five years of advisory experience,

despite David’s having only recently entered the securities industry. And Respondents made

misrepresentations and omissions to clients about why APA changed brokers. Respondents did

all of this to benefit themselves by recruiting and retaining clients.

There is also no genuine dispute that Respondents acted with scienter. The civil

proceeding established that Respondents knowingly or recklessly misled their clients, 14

concealed material information from the clients, and provided false information to clients. 15

Through their misconduct, Respondents repeatedly violated a scienter-based antifraud

11

Tzemach David Netzer Korem, Exchange Act Release No. 70044, 2013 WL 3864511,

at *4 (July 26, 2013).

12

McCarthy v. SEC, 406 F.3d 179, 188 (2d Cir. 2005).

13

See SEC v. Cap. Gains Rsch. Bureau, Inc., 375 U.S. 180, 190–94 (1963) (explaining that

Advisers Act Section 206 imposes fiduciary duties on investment advisers); James C. Dawson,

Advisers Act Release No. 3057, 2010 WL 2886183, at *4 (July 23, 2010) (“[W]e have

consistently viewed misconduct involving a breach of fiduciary duty or dishonest conduct on the

part of a fiduciary . . . as egregious.”).

14

See Dolphin & Bradbury, Inc. v. SEC, 512 F.3d 634, 639 (D.C. Cir. 2008) (holding that

scienter may be established by recklessness, “an extreme departure from the standards of

ordinary care . . . which presents a danger . . . that is either known to the [actor] or is so obvious

that the actor must have been aware of it” (citation omitted)).

15

See ACA Fin. Guar. Corp. v. Advest, Inc., 512 F.3d 46, 65 (1st Cir. 2008) (“[T]he fact

that a defendant knowingly made a false statement is ‘classic evidence’ of scienter.” (citation

omitted)); cf. Shreyans Desai, Exchange Act Release No. 80129, 2017 WL 782152, at *4 (Mar.

1, 2017) (finding that respondent acted with a high degree of scienter where he knowingly lied to

investors to induce them to invest and attempted to conceal his misconduct).

7

provision, 16 and David necessarily acted with scienter in aiding and abetting APA’s

recordkeeping violations. 17

Respondents dispute that the egregiousness and degree of scienter of their misconduct

warrant a bar by contending that APA officers and Schwab representatives “approved of and/or

facilitated” in some respects Michael’s impersonation of David and his use of APA’s client

database and the Schwab platform. But APA also expressly told Respondents that they still had

to disclose Michael’s role to their clients. And even if APA and Schwab fully approved of

Michael’s conduct, this does not change that Respondents—for years and with scienter—

breached their fiduciary duties to their clients by making fraudulent misrepresentations and

omissions about Michael’s role as their adviser and why APA changed brokers. 18

Even assuming arguendo that Respondents are correct that their clients were not

financially harmed, our focus is on protecting investors generally and the future threat that

Respondents could pose to investors and the markets. 19 Here, we disagree with Respondents that

they did not harm any clients. By misleading their clients about Respondents’ roles and status as

adviser representatives with APA, Respondents deprived their clients of information critically

important for investors to make informed decisions about investments and whom to retain as an

adviser. 20 Nor do we agree with Respondents that they did not personally benefit from their

conduct, since their misconduct allowed them to retain and recruit fee-paying clients.

16

See Malouf v. SEC, 933 F.3d 1248, 1263 (10th Cir. 2019) (explaining that liability under

Advisers Act Section 206(1) requires proof of scienter).

17

See Graham v. SEC, 222 F.3d 994, 1004 (D.C. Cir. 2000) (observing that knowledge or

recklessness establishes scienter for aiding and abetting liability).

18

See, e.g., Stephen Condon Peters, Advisers Act Release No. 6556, 2024 WL 624010, at

*5 (Feb. 14, 2024) (explaining that the involvement or acquiesce of others in a fraudulent

scheme cannot enable the respondent “to avoid consequences for his own conduct”). The

Commission has similarly long held that deficiencies in supervision or failures to prevent a

violation do not exonerate the individual who was allegedly inadequately supervised. See, e.g.,

Orlando Joseph Jett, Exchange Act Release No. 49366, 2004 WL 2809317, at *17 (Mar. 5,

2004); Donald T. Sheldon, Exchange Act Release No. 31475, 1992 WL 353048, at *19 n.130

(Nov. 18, 1992).

19

See, e.g., Sean R. Stewart, Exchange Act Release No. 6563, 2024 WL 835280, at *5

(Feb. 27, 2024), petition denied, 24-1041-ag, 2025 WL 751360 (2d Cir. Mar. 10, 2025); see also

Dawson, 2010 WL 2886183, at *3 (explaining that characterization of conduct as “egregious”

was warranted where the adviser “breached the trust that is the underpinning of the fiduciary

relationship, regardless of whether there was any net loss of money to his clients”).

20

Cf. SEC v. LFS Funding Ltd. P’ship, No. 2:21-cv-04211-HDV-MARx, 2023 WL

6373859, at *1 (C.D. Cal. Aug. 25, 2023) (finding that a broker’s misrepresentations concerning

his identity were “certainly material” due to the “substantial likelihood that a reasonable investor

would consider [this information] important in deciding whether to buy or sell securities”

(quoting Basic Inc. v. Levinson, 485 U.S. 224, 231–32 (1988))); SEC v. Cutting, No. 2:21-cv-

8

2.

Respondents have not recognized that misleading their clients was wrong,

their occupation presents opportunities for future violations, and their

conduct creates a risk of future violations.

Respondents have recognized the wrongfulness of their misconduct to some degree by

testifying that Michael’s impersonation of David was wrong, and their no-admit no-deny consent

to judgment suggests some additional recognition of wrongfulness. But Respondents have not

recognized the core aspect of their misconduct: that misleading their clients was wrong. 21

Respondents’ occupation also presents opportunities for future violations. They were

both associated with an investment adviser while engaging in their misconduct. According to

their Investment Adviser Public Disclosure (“IAPD”) reports, they were also each associated

with another investment adviser as recently as August 2025, and Michael was still associated

with that investment adviser as of June 2026. 22

We credit Respondents’ assurances against future misconduct. In particular, Respondents

claim that they are unlikely to reoffend because the firm they joined after leaving APA

established a “compliance framework” whereby the trades Respondents recommend for clients

must be approved and executed by firm staff. But these restrictions provide limited assurances,

given that the compliance framework is narrowly focused on Respondents’ investment

recommendations, and Respondents do not explain how these measures would prevent other

misconduct, including the recurrence of their own misconduct at issue here: the fraudulent

misrepresentations and omissions to investor clients and failure to preserve client

communications about investment advice and trades.

Respondents also dispute that there is a risk of future harm because they have participated

in the securities industry for over eight years without further incident. Respondents compare

their case to McCarthy v. SEC, in which the U.S. Court of Appeals for the Second Circuit

remanded a Commission decision after finding that the Commission had not adequately

considered various factors when affirming an SRO’s sanction, including the appellant’s clean

disciplinary history since his violation. 23 Here, we recognize that there have been no reports of

disciplinary action against Respondents since the district court proceeding. But their recent

compliance does not outweigh our overall concerns about Respondents’ remaining in the

103-BLW, 2022 WL 4536816, at *11 (D. Idaho Sept. 28, 2022) (finding defendant’s statements

regarding his financial advisory experience and securities licensure were “materially false and

misleading”).

21

See N. Woodward Fin. Corp., Exchange Act Release No. 74913, 2015 WL 2151765, at

*13 (May 8, 2015) (observing that although individuals “are entitled to present a vigorous

defense,” a “continued refusal to acknowledge” misconduct “demonstrates a misunderstanding

of, or lack of regard for, their professional obligations”).

22

See George Charles Cody Price, Advisers Act Release No. 4631, 2017 WL 405511, at *3

(Jan. 30, 2017) (expressing concern that respondent’s occupation would present opportunities for

future violations where he did not indicate that he planned to leave the securities industry).

23

406 F.3d at 189.

9

industry given their prolonged willingness to breach their fiduciary duties to their clients for their

own personal benefit and the serious risk of future violations. 24

3.

Respondents’ other arguments against industry bars are without merit,

although we find that David should be allowed to apply to reenter the

industry.

Respondents argue that industry bars are inappropriate because the Commission has

never barred an investment adviser who agreed to resolve the civil enforcement action and had

not been criminally convicted based on the underlying misconduct. But that is incorrect, as the

Commission has barred individuals in just such circumstances. 25

Respondents also contend that industry bars would be a “punitive sanction” and “heavily

disproportionate to the conduct at issue.” To the contrary, we find that industry bars against

them are necessary responses considering all the factors discussed herein to protect the investing

public from further harm, not to punish Respondents. Respondents further contend that they

“have been punished enough” due to the loss of at least half of their clients and revenue since the

civil complaint was filed. But these harms do not mitigate the need for remedial sanctions given

that they were ultimately caused by Respondents’ own misconduct. 26

Respondents further note that David was in his mid-twenties and relatively inexperienced

at the time of the misconduct. But David’s inexperience does not fully outweigh our concerns.

He knowingly or recklessly engaged in fraud, to benefit his father and himself, in violation of his

fiduciary duties. And he did so by misleading Respondents’ clients to believe that Michael was

associated with APA and concealing the reason Schwab terminated APA. Such conduct

demonstrates to us that David lacks the integrity demanded of those working in the securities

industry. 27

24

See, e.g., John A. Carley, Exchange Act Release No. 57246, 2008 WL 268598, at *22

n.119 (Jan. 31, 2008) (finding age of misconduct outweighed by other factors).

25

See, e.g., Ron K. Harrison, Advisers Act Release No. 6599, 2024 WL 1961107 (May 3,

2024) (barring investment adviser who had settled civil enforcement action and was not

convicted based on underlying misconduct); Travis Laska, Advisers Act Release No. 6477, 2023

WL 7279485 (Nov. 3, 2023) (same).

26

See, e.g., Anthony Fields, Exchange Act Release No. 74344, 2015 WL 728005, at *22 &

nn.145, 147 (Feb. 20, 2015) (finding that collateral consequences of wrongdoing was not

mitigating and collecting cases); see also Gary M. Kornman, Exchange Act Release No. 59403,

2009 WL 367635, at *9 (Feb. 13, 2009) (observing that “[f]inancial loss to a wrongdoer as a

result of his wrongdoing does not mitigate the gravity of his conduct” (internal quotation and

citation omitted)).

27

See SEC v. Hansho, 784 F. Supp. 1059, 1108 (S.D.N.Y. 1992) (“Those who hold

themselves out as professionals with specialized knowledge and skill to furnish guidance can not

be heard to claim youth or inexperience when faced with charges of violations of the anti-fraud

provisions of the securities laws.”).

10

Nevertheless, we find that various circumstances here weigh against imposing an

indefinite bar on David. While playing a central role in the misconduct described above, we

recognize that David was new to the industry and allowed his father, Michael, the more

experienced professional, to manage their advisory business, including retaining, recruiting, and

communicating with Respondents’ clients about investment advice and trades. In fact, because

most of Respondents’ clients were Michael’s existing clients who would not have moved to APA

without him, he was paid twice as much as David. We further note that, while not dispositive,

David’s misconduct ended approximately eight years ago, the injunction was entered almost four

years ago, and this proceeding was instituted almost three years ago, While we remain

concerned with David’s reentry into the industry, and do not suggest to minimize the

egregiousness of his misconduct, we think it is appropriate to allow him to apply to reenter the

industry after today.

In contrast, Michael, an experienced securities professional, played a lead role in

Respondents’ egregious misconduct. We find that Michael’s willingness to mislead

Respondents’ clients—for over two years and with scienter—and to make false statements to

clients to conceal his own misconduct create a serious risk that he will again violate the securities

laws and necessitates imposing an industry bar to protect the investing public.

*

*

*

The Commission may impose bars to protect the investing public from a respondent’s

future actions by restricting access to areas of the securities industry where a demonstrated

propensity to engage in violative conduct may cause further investor harm. As explained above,

the record establishes that Michael is unfit to participate in the securities industry and that

allowing him to do so would pose a risk to investors.

We also find that, cumulatively, all of the factors discussed above weigh in favor of

barring David, with a right to apply for reentry anytime after today, as an appropriate remedial

measure to protect the investing public. Imposing a bar with such a right to apply for reentry

will convey to David the seriousness of his misconduct and decrease the likelihood that he will

engage in future misconduct. Because David will need to apply to associate notwithstanding the

bar, the Commission or a self-regulatory organization will also determine what, if any,

appropriate conditions should be imposed on his future involvement in the industry. 28 David

should nonetheless be readmitted to the industry after today if he can make a proper showing as

to, for example, his proposed supervision and lack of additional misconduct. 29 That is, in

28

2008).

29

Cf. Robert Radano, Advisers Act Release No. 2750, 2008 WL 2574440, at *8 (June 30,

See, e.g., Applications by Barred Individuals for Consent to Associate with a Registered

Broker, Dealer, Mun. Sec. Dealer, Inv. Adviser or Inv. Co., Exchange Act Release No. 20783,

1984 WL 547096, at *3 n.23 (Mar. 16, 1984) (adopting release for predecessor to Commission

Rule of Practice 193) (“In those cases where the Commission bar order specifies that a person

may apply for consent to associate after a specified period of time, the Commission generally

will grant the application upon a proper showing made after expiration of the specified period of

time.”); Paul Edward Van Dusen, Exchange Act Release No. 18284, 1981 WL 315505, at *3

11

determining to provide a right to apply for reentry, we have already considered “the nature of the

findings that resulted in the bar,” 30 and therefore those findings should not be considered afresh

when determining whether to permit reentry. 31 Nonetheless, in evaluating whether reentry is in

the public interest, it would still be appropriate to consider whether “the proposed supervision,

procedures, or terms and conditions of employment are reasonably designed to prevent a

recurrence of the conduct that led to imposition of the bar.” 32

We therefore grant the Division’s motion for summary disposition and conclude that it is

in the public interest to bar Respondents from association with any investment adviser, broker,

dealer, municipal securities dealer, municipal advisor, transfer agent, or nationally recognized

statistical rating organization, with David Sztrom provided a right to apply for reentry to the

appropriate self-regulatory organization, or if there is none, to the Commission.

An appropriate order will issue.

By the Commission (Chairman ATKINS and Commissioners PEIRCE and UYEDA).

Vanessa A. Countryman

Secretary

(Nov. 24, 1981) (holding that, when the Commission imposes a bar with a right to apply for

reentry after a certain time, a self-regulatory organization cannot deny a reapplication after that

time expires based solely on the misconduct that led to the Commission imposing the bar with a

right to apply for reentry).

30

Rule of Practice 193(a)(3), 17 C.F.R. § 201.193(a)(3) (providing that the nature of the

findings is generally a factor to consider in motions for reentry).

31

See Van Dusen, 1981 WL 315505, at *3 (rejecting denial of reentry based solely on

misconduct underlying a bar with a right to apply for reentry because the Commission had

already “carefully weighed the requirements of the public interest in the light of [the

respondent’s] alleged misconduct” and “concluded that it was appropriate to allow him, after 18

months, to apply for permission to become associated with a broker-dealer in a supervisory

capacity”); cf. Manish Singh, Exchange Act Release No. 102815, 2025 WL 1091664, at *1 (Apr.

10, 2025) (listing the factors for “evaluating an application for reentry from an administrative

penny stock bar with a right to reapply,” which do not include the nature of the findings that

resulted in the bar with a right to reapply).

32

Rule of Practice 193(a)(1), 17 C.F.R. § 201.193(a)(1).

UNITED STATES OF AMERICA

before the

SECURITIES AND EXCHANGE COMMISSION

INVESTMENT ADVISERS ACT OF 1940

Release No. 7010 / September 21, 2026

Admin. Proc. File No. 3-21400

In the Matter of

MICHAEL SZTROM and DAVID SZTROM

ORDER IMPOSING REMEDIAL SANCTIONS

On the basis of the Commission’s opinion issued this day, it is

ORDERED that Michael Sztrom and David Sztrom are barred from association with any

investment adviser, broker, dealer, municipal securities dealer, municipal advisor, transfer agent,

or nationally recognized statistical rating organization, provided, however, that David Sztrom

may apply to become so associated to the appropriate self-regulatory organization, or if there is

none, to the Commission.

By the Commission.

Vanessa A. Countryman

Secretary