https://www.sec.gov/litigation/admin/2019/ia-5371.pdf [On September 26, 2019, Cetera Investment Advisers LLC settled an enforcement action with the SEC.  Since at least January 2007, Cetera has paid cash fees to approximately 350 banks to, among other things, solicit investment advisory clients on behalf of Cetera. As part of this process, Cetera did not require the banks to give clients … Read More

On July 2, 2019, the SEC charged Parrish Group, an investment adviser, and Davis, Parrish Group’s founder, with material misrepresentations. Specifically, Parrish Group and Davis repeatedly misled prospective clients about, among other things, Parrish Group’s assets under management, its clients, the number and identity of its employees, and its registration status with the SEC. Parrish … Read More

On July 1, 2019, the SEC charged Fieldstone Financial Management Group LLC and its principal Kristofor Behn with defrauding retail investment advisory clients by failing to disclose conflicts of interest related to their recommendations to invest in securities issued by affiliates of Oregon-based Aequitas Management LLC.  Behn also fraudulently misused approximately $500,000 of one investor’s … Read More

On June 27, 2019, the SEC charged State Street Bank and Trust Company with overcharging mutual funds and other registered investment company clients for expenses related to the firm’s custody of client assets. The overcharges included a secret markup that State Street tacked on to the cost of sending secured financial messages through the Society of … Read More

On June 10, 2019, David Goulding was the Chief Compliance Officer (“CCO”) for The Nutmeg Group LLC (“Nutmeg”), an SEC registered investment adviser and general partner to 15 unregistered investment partnerships (“the Funds”). His responsibilities included valuing the Funds’ investments, preparing quarterly account statements for the Funds, and tracking the assets of the Funds.  David … Read More

On June 5, 2019, the SEC issued new rule adopting amendments to SEC Form CRS and issued an interpretative guidance.  The Form CRS Relationship Summary will require registered investment advisers and broker-dealers to provide retail investors with simple, easy-to-understand information about the nature of their relationship with their financial professional.  While facilitating layered disclosure, the … Read More

On June 4, 2019, the SEC charged a private fund manager in the mortgage-backed securities space has agreed to pay a $5 million penalty to settle charges stemming from compliance deficiencies that contributed to the firm’s failure to ensure that certain securities in its flagship fund were valued properly.  The fund manager’s chief investment officer … Read More

On May 28, 2019, the SEC charged Stephen Brandon Anderson with defrauding clients by overcharging advisory fees of at least $367,000. According to the SEC’s order, Anderson owned and operated River Source Wealth Management, LLC, a now-defunct registered investment adviser in North Carolina.  River Source’s primary revenue stream was customer advisory fees.  Customer agreements provided … Read More

On May 28, 2019, the SEC charged Sean Premock with devising a scheme to defraud investors and obtained money and property by means of false and fraudulent pretenses, representations, and promises. The indictment alleges that Premock raised approximately $1.3 million from his clients by making numerous misrepresentations, including that the clients would earn high rates … Read More

On May 23, 2019 the SEC issued a risk alert on safeguarding of customer information stored on cloud and other network storage solutions.  The Risk Alert identifies security risks and best practices associated with the storage of customer records and information by investment advisers and broker-dealers (collectively, firms) in the cloud and on other electronic … Read More