27 firms settle charges with SEC over violations in filing investor forms

On Behalf of | Aug 4, 2021 | Financial Advisor Misconduct

Over two dozen investment advisers and broker-dealers have agreed to settle charges filed against them by the Securities and Exchange Commission, according to Advisor News. The SEC held that they failed to file and deliver customer relationship summary forms to retail investors on a timely basis.

The forms are designed to give a summary about the services a firm offers, along with its fees and other information that would help investors make an informed decision about which firm to work with.

The customer relationship summaries, known as Form CRS, were instituted by the SEC in 2019. Firms were required to deliver them to retail investors by deadlines in June and July of 2020 and to post their current Form CRS on their website. The 21 investment advisers and 6 broker-dealers named in the charges missed those deadlines. The SEC said that they did not file or deliver the forms until they had been reminded twice by regulators.

The commission noted that there are mandated filing and disclosure obligations that apply to firms who register with the SEC. Gurbir S. Grewal, Director of the SEC’s Enforcement Division, released a statement that read in part, “Today’s cases reinforce the importance of meeting those obligations and providing retail investors with information that is intended to help them understand their relationships with their securities industry professionals.”

The SEC said the firms involved did not admit or deny the findings, but did agree to be censured, to cease and desist from the violations, and to pay civil penalties.

The following investment advisers have agreed to pay a $97,523 civil penalty:

  • Cohen Klingenstein LLC of New York, NY
  • Embree Financial Group Inc. of Chicago, IL
  • Minot DeBlois Advisors LLC of Boston, MA
  • Paratus Financial Inc of Dallas, TX

The following investment advisers have agreed to pay a $50,000 civil penalty:

  • The Cavanaugh Group Inc. of Towson, MD

The following investment advisers have agreed to pay a $25,000 civil penalty:

  • Altschuler, James Stephen of Lexington, MA
  • Canton Hathaway LLC of Providence, RI.
  • Carmel Capital Management LLC of Carmel
  • Castle Wealth Planning LLC of Santa Barbara, CA
  • Harold Davidson & Associates Inc. of Los Angeles, CA
  • John A. Bysko Associates of Old Lyme, CT
  • Madden Funds Management Ltd. of Oak Park, IL
  • Medallion Wealth Advisors LLC of Farmington, CT
  • Mighty Oak Strong America Investment Company of Mechanicsburg, PA
  • O’Brien Greene & Co. Inc of Media, PA
  • Quantitative Asset Management LLC of Wayzata, MN
  • Summit Financial Advisors Inc. of Lebanon, OH
  • Westbourne Investments Inc. of Alexandria, VA

The following investment advisers have agreed to pay a $10,000 civil penalty:

  • Dynamic Trading Management LLC of White Plains, NY
  • Eastside Financial Advisors LLC of Fayetteville, NY
  • Sauberan & Company LLC of Lockport, NY

Additionally, the following broker-dealers have agreed to civil penalties:

  • Bill Parker Agency of Sacramento, CA will pay $10,000
  • Birkelbach & Co. of Ponte Vedra Beach, FL will pay $10,000
  • Capital Portfolio Management Inc. of Timonium, MD will pay $25,000
  • Greentree Investment Services Inc. of Bridgeville, PA will pay $10,000
  • ST Invest LLC d/b/a Trade App of San Antonio, TX will pay $10,000
  • Tradier Brokerage Inc. of Charlotte, NC will pay $50,000

Lewitas Hyman represents financial professionals, financial institutions and investors in investment loss, employment and disclosure matters, and in regulatory investigations. Contact us by phone at (312) 291-4600 or through our online contact form for a free consultation.

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