Regulation and Compliance issues for Wealth Professionals can be challenging to navigate especially when the SEC is involved. Catch the latest news and analysis on compliance updates that impact financial advisors.
The order is the latest in a recent run of SEC actions against firms alleging they failed to disclose conflicts around mutual fund share class selection.
Chair Jay Clayton touted the changes as necessary updates to requirements that had gone unchanged for decades, though some commissioners expressed concerns even as they voted in support.
While previous exams looked at 'good faith' efforts by firms to comply, next year the commission will focus on specific rule requirements that 'go beyond suitability standards.'
The agency said the firm had failed to properly oversee registered representatives' recommendations on variable annuities, mutual funds and 529 plans, affecting about 2,400 customers in total.
The regulatory agency said three Cetera broker/dealers had previously been told by the SEC of the failures to properly supervise certain transactions of dually registered representatives, but they failed to set up systems for properly doing so.
The SEC alleges CapWealth failed to disclose lower-cost share class options to its clients. But the RIA's founder calls the complaint "a shameful exercise and an abuse of power.”
