SEC Charges 21 Registered Investment Advisors and 6 Brokers Dealers

SEC Charges 21 Registered Investment Advisors and 6 Brokers Dealers

Securities and Exchange Commission (SEC) has fined and charged 21 registered investment advisors and six broker-dealers with failing to timely file and deliver customer relationship summaries, known as Form CRS. The penalties range from $10,000 to approximately $97,500.

The SEC approved in June 2019 its four-part package regulations that aim to reform investment advice standards for financial advisors and brokers. Regulation Best Interest, which is the SEC’s broker advisory rule, Form CRS relationship summary, and two distinct interpretations of the Investment Advisers Act (40), were included in the regulation.

The Form CRS provides information to retail investors about the firm’s services, fees, conflicts of interest, and other details. The document was required to be filed with the SEC by registered investment advisors and broker-dealers and to be delivered to potential, new, and existing investors by June 30, 2020. The form was also required to be displayed on the website of firms that had one.

According to the SEC, no 27 firms submitted or delivered their Form CRMS or posted it on their website until they were twice reminded of missed deadlines.

Gurbir Grewal (director of the SEC’s enforcement division) stated that registration with the SEC to be an investment advisor or broker-dealer entails mandatory filing and disclosure obligations. “These cases emphasize the importance of fulfilling those obligations and providing information to retail investors that help them understand their relationships, said Gurbir Grewal, director of the SEC’s enforcement division.

The following companies were censured by the SEC and fined:

Altschuler, James Stephen was a Massachusetts-based RIA and was fined $25,000.

Canton Hathaway LLC was a Rhode Island-based RIA and was fined $25,000.

Carmel Capital Management LLC was a California-based RIA and was fined $25,000.

Castle Wealth Planning LLC was a California-based RIA and was fined $25,000.

Cohen Klingenstein LLC was a New York-based RIA and was fined $97523.

Dynamic Trading Management LLC was a New York-based RIA and was fined $10,000.

Eastside Financial Advisors LLC was a New York-based RIA and was fined $10,000.

Embree Financial Group Inc. was fined $97523.

Harold Davidson & Associates Inc. was a California-based RIA and was fined $25,000.

John A. Bysko Associates was a Connecticut-based RIA and was fined $25,000.

Madden Funds Management Ltd. was a Illinois-based RIA and was fined $25,000.

Medallion Wealth Advisors LLC was a Connecticut-based RIA and was fined $25,000.

Mighty Oak Strong America Investment Company was fined $25,000.

Minot DeBlois Advisors LLC was a Massachusetts-based RIA and was fined $97523.

O’Brien Greene & Co. Inc. was a Pennsylvania-based RIA and was fined $25,000.

Paratus Financial Inc. was a Texas-based RIA and was fined $97523.

Quantitative Asset Management LLC was a Minnesota-based RIA and was fined $25,000.

Sauberan & Company LLC was a New York-based RIA and was fined $10,000.

Summit Financial Advisors Inc. was a Ohio-based RIA and was fined $25,000.

The Cavanaugh Group Inc. was a Maryland-based RIA and was fined $50,000.

Westbourne Investments Inc. was a Virginia-based RIA and was fined $25,000.

Bill Parker Agency, a California-based broker/dealer, was penalized $10,000

Birkelbach and Co., a Florida-based broker/dealer, was penalized $10,000

Capital Portfolio Management Inc. was a Maryland-based broker/dealer and was fined $25,000.

Greentree Investment Services Inc. was a Pennsylvania-based broker/dealer and was fined $10,000.

ST Invest LLC d/b/a Trade App was fined $10,000 for being a Texas-based broker/dealer.

Tradier Brokerage Inc. was a North Carolina-based broker/dealer and was fined $50,000

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