In last Tuesday's column, I used the story of Dana Giacchetto and his firm, Cassandra Group, to explain how to protect yourself from unscrupulous investment advisers. In it, I said you should always inspect something called Form ADV when checking an investment adviser's background.

Taking my own advice, I decided to look up Form ADV for Giacchetto, who was once a friend and investment adviser to A-list celebrities like Leo DiCaprio and Courteney Cox Arquette. Now he's in jail, accused of stealing as much as $9 million from client accounts and using the money to pay for meals, hotels and the rent on his New York City loft. (He plead not guilty to related criminal charges.)

Had these stars scrutinized the same document when they entrusted their money to Giacchetto's firm, they might have found some warning signs that could have saved them a lot of money.

Investment advisory firms are required to file the two-part Form ADV with securities regulators, and the registration includes important information on the disciplinary record of a firm and the people running it.

Your investment adviser is supposed to provide Part II of this registration to you, if you ask for it. This section contains the descriptive information about the managers of the firm and explanations about the firm's services. You can also ask for Part I, which contains a yes-or-no checklist of questions about the adviser's disciplinary history. Frankly, the document is pretty easy to read.

If your adviser doesn't give it to you, you also can get it by calling the Securities and Exchange Commission's Public Reference Room at 202-942-8090. You'll have to pay copying costs, and it could take weeks. Instead, I called Primark's (PMK:NYSE - news) Financial Information Division and paid to get the document quickly. It only took a day, but the service cost $129.

In Part I of Cassandra's ADV, all the important boxes are checked no.

In the past 10 years, had Giacchetto ever been convicted of or plead guilty to a felony or misdemeanor involving investments or investment-related businesses? No.

Had he ever made a false statement to a regulatory body or commodities exchange? No.

Question 13 is a key one: It asks whether the adviser has custody of the client's funds or securities. On Cassandra's form, the answer was no. That money was supposed to be held by broker Brown & Co.

But the SEC, in an April 3 civil complaint filed against Giacchetto and Cassandra, charges that Giacchetto "has knowingly or recklessly taken custody of more than 100 checks and deposited more than $20 million of his clients' funds in bank accounts where those moneys have been commingled with Cassandra's operating funds and dispersed by Giacchetto for a variety of purposes, including the payment of Cassandra's and Giacchetto's expenses."

The SEC complaint also says he wrongfully endorsed checks drawn from client accounts at Brown & Co. and put those checks in his firm's bank accounts.

Giacchetto's new attorney Ronald Fischetti says he's "not that familiar with the facts yet." However, "Dana has told me repeatedly that he is entirely innocent of these charges. If anything, money could have been commingled without his knowledge but he didn't steal or purloin any money."

Nonetheless, some clients were evidently aware that he did have custody of some of their money.

When clients inquired about money withdrawn from accounts, Giacchetto said he had invested the money in securities held outside the clients' Brown & Co. accounts, according to the SEC complaint, which goes on to allege that "Cassandra and Giacchetto knowingly or recklessly told clients that assets transferred from their Brown accounts were held by Cassandra in 'escrow,' 'trust' or 'sub' accounts. These representations were false and/or misleading, as Cassandra had no escrow, trust or sub accounts."

Even if it was only temporary, those actions should have been an immediate flag to investors.

Whatever the adviser is telling the SEC in the Form ADV should be consistent with what that adviser is telling you, the client. If it's not, you should start asking questions. Which brings us to the next example.

Part I of the registration, dated March 31, 1999, says Cassandra Group had slightly more than $100 million in assets under management.

That number isn't close to the figure that was appearing in the press at that time. A story about Giacchetto that ran in the New York Post on April 29, 1999, says he had more than $400 million under his control. He told CNNfn's Web site in mid-July that he managed or advised on $430 million.

Even if that amount included money outside the advisory firm, that number in the ADV should have at least raised some suspicions.

Next, investors should always scrutinize the backgrounds of the people who are working at any firm. That information is laid out right there in registration.

According to Cassandra's registration, three people provided general investment advice to clients: Giacchetto, Soledad Bastiancich and Mark Pollard.

According to the document, Bastiancich did have financial experience, working at investment bank Allen & Co. for more than two years. She also has a degree from Yale Law School and previous legal experience. (Bastiancich could not be reached for comment.)

Mark Pollard, on the other hand, did not have any visible financial experience before joining Cassandra in September 1997. He didn't have a college degree and worked for an entertainment company for roughly six years before starting at Cassandra, according to the document. He also had experience working in the art world, the registration says. (Pollard could not be reached for comment.)

It's safe to say that most investors would probably want to be getting investment advice from someone with some experience.

Giacchetto's background detailed in the registration is slightly more impressive: He worked at The Boston Co., a money management firm, as an account executive for more than six years in the 1980s. However, the SEC says not all this information about his background is accurate.

In its complaint, the SEC says the firm's 1998 and 1999 Forms ADV claimed that Giacchetto graduated with a bachelor's degree from the University of Massachusetts in 1984 and he took two years of graduate level classes at Harvard. "Those statements were false as Giacchetto obtained his B.A. degree from U. Mass. in 1990, and Giacchetto only took 'extension' school courses from Harvard, which he employed to obtain his undergraduate degree from U. Mass," the complaint says.

The SEC also alleges that Cassandra's 1998 Form ADV said the firm managed $315 million, although the assets were actually less than $200 million.

As a footnote, Cassandra's 1999 Form ADV was notarized by Christopher Cuomo, an ABC News correspondent and son of New York's former Gov. Mario Cuomo. Cuomo, an attorney who once worked with Giacchetto, says he didn't do any work in preparing the document. "I worked there on the deal side," he says. "I didn't manage money."

Granted, there's no guarantee an unscrupulous adviser is going to be truthful when filling out Form ADV. But by reading the document, you may pick up on some obvious inconsistencies that may clue you in to the fact that an adviser is not telling you the whole story.

Giacchetto's story continues to unfold. Look for an upcoming book or movie. Maybe his former clients can play themselves.