The Securities and Exchange Commission announced an enforcement action against an investment advisory firm that failed to properly prepare clients for additional transaction costs beyond the “wrap fees” they pay to cover the cost of several services bundled together. In wrap fee programs, sub-advisers typically use a sponsoring brokerage firm to execute their trades on...Read more
In a No Action Letter issued to MML Investors Services, LLC on July 19, 2016, the SEC changed the requirements for Introducing Broker-Dealers forwarding customer checks. To mirror recent changes to the requirements surrounded Variable Annuities, the SEC has extended this interpretation to all accounts. Specifically, the SEC states:Read more
Based on your representations, the Staff will...
The SEC's Office of Compliance Inspections and Examinations (“OCIE”) is undertaking an initiative to address the risk that registered advisers may be making certain conflicted investment recommendations to their clients. Specifically, OCIE is seeking to identify conflicts of interest tied to advisers’ compensation or financial incentives for recommending mutual fund and 529 Plan share classes that have substantial loads or...Read more
FINRA announced that it has fined a broker-dealer (BD) $2.25 million and ordered the firm to pay restitution of more than $716,000 to affected customers for selling leveraged, inverse and inverse-leveraged exchange-traded funds (non-traditional ETFs) to retail customers without reasonable supervision, and for recommending non-traditional ETFs that were not suitable. In August 2009, in response to...Read more