Cetera Investment Advisers Sanctioned for Solicitation Disclosure Violations
Cetera Investment Advisers LLC will reportedly pay a penalty of $185,000 to settle SEC charges that it allegedly paid cash fees to approximately 350 banks to solicit investment advisory clients on behalf of the firm without providing proper disclosures to clients, according to an administrative order.
According to the SEC order, since at least January 2007, Cetera has allegedly paid cash fees to approximately 350 banks to purportedly solicit investment advisory clients on behalf of Cetera.
The firm reportedly did not require the banks to give clients a separate written disclosure document or otherwise provide the information required under the Solicitor Rule.
As a result, according to the charges, Cetera’s clients were not informed of the extent of the banks’ financial interest in the clients’ choice of Cetera as an investment adviser and did not have all of the information that would enable them to evaluate the solicitor’s recommendation.
By purportedly paying cash fees for solicitation activities and not ensuring that advisory clients received the required disclosures, Cetera violated the Solicitor Rule.
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