The lawsuit, which seeks a class action, was filed in New York federal court last week. It follows similar suits brought against UBS, Ameriprise and LPL Financial.
According to the federal complaint calling for a class action, the firm’s policies “maximize profits for UBS while at the same time disregarding its clients’ best interests.”
The lawsuits filed in Minnesota and California federal courts come as a New York-based law firm announced a new task force looking into the controversial practice, assisted by former SEC Commissioner Robert Jackson, Jr.
Adding the Virginia and Pennslyvania-based Agili to CW Advisors will boost the combined firm to 11 offices nationwide, with 113 employees and $10 billion in AUM.
The Securities Industry and Financial Markets Association filed a lawsuit against the regulation that took effect last year, saying there was “no precedent for it in the securities laws.”
According to the commission, Russell Todd Burkhalter, the CEO of Drive Planning, allegedly used new funds to pay existing investors’ returns and personal expenses, including yacht and private jet payments.
