SEC Fines Dozens of Financial Firms for Missing Form CRS Filing Deadlines
The Securities and Exchange Commission has charged and fined 21 investment advisers and six broker-dealers for failing to timely file and deliver their client or customer relationship summaries.
The Securities and Exchange Commission has charged and fined 21 registered investment advisers and six broker-dealers for failing to “timely” file and deliver their customer relationship summaries – known as Form CRS. The fines range between $10,000 and approximately $97,500.
In June 2019, the SEC approved its four-part package of regulations aimed at reforming investment advice standards for brokers and financial advisors. The regulation included Regulation Best Interest – the SEC’s broker advice rule, the Form CRS relationship summary, and two separate interpretations under the Investment Advisers Act of 1940.
Form CRS is intended to provide retail investors with a brief summary about the services a firm offers, its fees, conflicts of interest, and other information. Registered investment advisers and broker-dealers were required to file the document with the SEC and deliver it to prospective, new, and existing investors by June 30, 2020. Firms were also required to display the form on their website, if they had one.
According to the SEC, none of the 27 firms filed or delivered their Form CRS, or posted it to their website, until being twice reminded of the missed deadlines.
“Registration with the SEC as an investment adviser or broker-dealer comes with mandated filing and disclosure obligations,” said Gurbir Grewal, director of the SEC’s enforcement division. “[These] 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 censured and fined the following firms:
Altschuler, James Stephen, a Massachusetts-based RIA, was fined $25,000.
Canton Hathaway LLC, a Rhode Island-based RIA, was fined $25,000.
Carmel Capital Management LLC, a California-based RIA, was fined $25,000.
Castle Wealth Planning LLC, a California-based RIA, was fined $25,000.
Cohen Klingenstein LLC, a New York-based RIA, was fined $97,523.
Dynamic Trading Management LLC, a New York-based RIA, was fined $10,000.
Eastside Financial Advisors LLC, a New York-based RIA, was fined $10,000.
Embree Financial Group Inc., an Illinois-based RIA was fined $97,523.
Harold Davidson & Associates Inc., a California-based RIA, was fined $25,000.
John A. Bysko Associates, a Connecticut-based RIA, was fined $25,000.
Madden Funds Management Ltd., an Illinois-based RIA, was fined $25,000.
Medallion Wealth Advisors LLC, a Connecticut-based RIA, was fined $25,000.
Mighty Oak Strong America Investment Company, a Pennsylvania-based RIA, was fined $25,000.
Minot DeBlois Advisors LLC, a Massachusetts-based RIA, was fined $97,523.
O’Brien Greene & Co. Inc., a Pennsylvania-based RIA, was fined $25,000.
Paratus Financial Inc., a Texas-based RIA, was fined $97,523.
Quantitative Asset Management LLC, a Minnesota-based RIA, was fined $25,000.
Sauberan & Company LLC, a New York-based RIA, was fined $10,000.
Summit Financial Advisors Inc., an Ohio-based RIA, was fined $25,000.
The Cavanaugh Group Inc., a Maryland-based RIA, was fined $50,000.
Westbourne Investments Inc., a Virginia-based RIA, was fined $25,000.
Bill Parker Agency, a California-based broker-dealer, was fined $10,000.
Birkelbach & Co., a Florida-based broker-dealer, was fined $10,000.
Capital Portfolio Management Inc., a Maryland-based broker-dealer, was fined $25,000.
Greentree Investment Services Inc., a Pennsylvania-based broker-dealer, was fined $10,000.
ST Invest LLC d/b/a Trade App, a Texas-based broker-dealer, was fined $10,000.
Tradier Brokerage Inc., a North Carolina-based broker-dealer, was fined $50,000.
