The U.S. Securities & Exchange Commission has filed charges against an Orcutt financial adviser accused of defrauding nine victims of more than $2 million.

The legal action occurred days before the surprise closures of four Santa Maria Valley and Lompoc eateries connected to 50-year-old Julie Darrah.

In a written statement, the SEC said it had filed charges against Darrah, who co-founded Vivid Financial Management in Orcutt. The complaint also named Vivid as a defendant, although the firm was acquired by another company in 2021.

The civil action filed last Friday and revealed Wednesday by the SEC asked a judge to freeze the assets of Darrah and any of her businesses, a request Darrah apparently agreed to, according to the SEC. 

The SEC action explains the abrupt closure of Old Town Orcutt’s Cups & Crumbs and The Homestead. Another Cups & Crumbs in Santa Maria and Central Coast Specialty Foods in Lompoc also closed Tuesday.

Social media sites for all four businesses had similar messages stating that the closure would last for an “undetermined period due to an unforeseen circumstance” while pledging transparency.

The SEC filing named PC&J Joint Ventures LLC as a relief defendant. PC&J involved Darrah and two other women linked to the four eateries allegedly backed with misappropriated funds.

As a relief defendant, PC&J has been accused of benefiting from illegally acquired funds but is not suspected of wrongdoing. The other two businesses with which PC&J partners were not named individually in the SEC filing.

“This emergency action concerns Darrah’s scheme to misappropriate millions of dollars from the bank and brokerage accounts of her clients and spend those funds on herself and on relief defendant PC&J, an ailing restaurant company that Darrah co-owns,” the SEC filing states. 

“In doing so, Darrah abused her position as an investment adviser to the clients that she stole from, and violated the fiduciary duties she owed those advisory clients. Darrah’s misconduct is ongoing because she still retains control of certain client assets and has been actively selling and dissipating the ill-gotten proceeds of her misappropriation.”

Victims included widows, retired school teachers and people with memory loss, according to the SEC filing.

She hid the scheme by changing client account mailing addresses to her own address, falsely disclosing that she was not acting as the trustee for any clients, and having a client initial two backdated promissory notes that Darrah provided to the SEC in response to its subpoenas.

“During the SEC’s pre-filing investigation, Darrah invoked her privilege against self-incrimination under the Fifth Amendment to the U.S. Constitution and refused to answer any questions concerning her conduct alleged in this complaint,” the SEC document stated.

The SEC’s complaint, filed in the U.S. District Court for the Central District of California, charges Darrah and Vivid with violating multiple laws related to financial advisers.

The eight claims in the SEC complaint include fraud related to purchasing or selling securities, fraud by an investment adviser, failure to adopt and implement compliance policies and procedures, making a false statement in a report filed with the SEC, fraud by an investment adviser, and aiding and abetting by an investment adviser. 

The SEC seeks disgorgement of allegedly ill-gotten gains, prejudgment interest, monetary penalties from Darrah and Vivid, along with permanent and conduct-based injunctions. 

Darrah agreed to the entry of a preliminary injunction against her as well as an order freezing assets, requiring an accounting and prohibiting the destruction of documents. 

The SEC declined to comment beyond the publicly filed civil complaint, a spokesman said. 

It’s not clear whether Darrah will face criminal charges, which reportedly would be filed by the U.S. Attorney’s Office. 

A representative of the U.S. Attorney’s Office said they do not confirm or deny the existence of an investigation.

Darrah also has been named in a federal lawsuit filed by Wealth Enhancement Group in Minnesota related to the fraud allegations. WEG acquired Vivid in late 2021 and now seeks to fully or partially rescind the purchase because of the alleged fraud.