Log in
Lost password
Become a member for free
Sign up
Sign up
Dynamic quotes 

4-Traders Homepage  >  News


Latest NewsCompaniesMarketsEconomy & ForexCommoditiesHot NewsMost Read NewsRecomm.Business LeadersVideosCalendar 

SEC - The United States Securities and Exchange Co : SEC Sanctions Two Investment Advisers for Best Execution Failures

07/31/2013 | 12:58pm US/Eastern
Washington D.C., July 31, 2013 -

The Securities and Exchange Commission today sanctioned two investment advisory firms for failing to seek best execution on client trades placed with their in-house brokerage divisions.

An SEC investigation found that New York-based A.R. Schmeidler & Co. (ARS), which is dually registered as an investment adviser and a broker-dealer, failed to reevaluate whether it was providing best execution for its advisory clients when it negotiated more favorable terms with its clearing firm.  This resulted in ARS retaining a greater share of the commissions it received from clients.  The firm failed to implement policies and procedures reasonably designed to prevent its best execution violations.

ARS agreed to pay more than $1 million to settle the charges.

A separate SEC investigation found that Gregory W. Goelzer and his Indianapolis-based dually registered firm Goezler Investment Management (GIM) made misrepresentations in its Form ADV about the process of selecting itself as broker for advisory clients.  The firm failed to seek best execution for its clients by neglecting to conduct the comparative analysis of brokerage options described in its Form ADV, and recommended itself as broker for its advisory clients without evaluating other introducing-broker options as the firm represented it would.

Goezler and GIM agreed to pay nearly $500,000 to settle the charges.

"These cases send a clear message to dually registered investment advisers and broker-dealers about our expectations in connection with their best execution analysis," said Andrew Ceresney, Co-Director of the SEC's Division of Enforcement.  "Investment advisers must carefully analyze whether their clients are obtaining the most beneficial terms reasonably available for their orders, particularly if those orders are executed through affiliated broker-dealers.  We will hold accountable those advisers who fail to do so."

Marshall S. Sprung, Co-Chief of the SEC Enforcement Division's Asset Management Unit, added, "There is a clear conflict of interest when investment advisers execute client trades through their broker-dealer arm.  The unit is focused on pursuing dually registered firms that fail to address this conflict through robust disclosure, best execution analysis, and compliance procedures."

ARS agreed to pay disgorgement of $757,876.88, prejudgment interest of $78,688.57, and a penalty of $175,000.  The firm also must engage an independent compliance consultant.  Without admitting or denying the SEC's findings, ARS consented to a censure and cease-and-desist order.

GIM agreed to pay disgorgement of $309,994, prejudgment interest of $53,799, and a penalty of $100,000.  The firm must comply with certain undertakings, including the continued use of a compliance consultant and the separation of its chief compliance officer position from the firm's business function.  Goelzer agreed to pay a $35,000 penalty.  Without admitting or denying the SEC's findings, Goelzer and GIM also consented to censures and cease-and-desist orders.

The SEC's investigation of ARS was conducted by Michael Birnbaum, Jason Sunshine, and Lara Shalov Mehraban of the New York Regional Office.  Examinations of ARS were conducted by Francine Catapano, Thomas Thanasules, and David Eidelman of the New York Regional Office's investment adviser/investment company examination program, and Stephen Debella, Kenny Sabogal, and Ronald Krietzman of the New York Regional Office's broker dealer examination program.  The SEC's investigation of GIM was conducted by Jeffrey Shank and Paul Montoya of the Asset Management Unit in the Chicago Regional Office, and Max Gillman of the Chicago office's investment adviser/investment company examination program.  The examination of GIM was conducted by Angie Evans, Max Gillman, Kelvin Davis, Alicia Tate, Douglas Adams, and Peter Driscoll of the Chicago office's investment adviser/investment company examination program.

distributed by
React to this article
Latest news
Date Title
01:54a MICROSOFT : Volvo to develop next-gen automotive tech with Microsoft
01:54a BAYERISCHE MOTOREN WERKE : New BMW Concept Compact sedan
01:54a BANK OF CYPRUS PUBLIC : Banks fudging real extent of NPLs
01:51a NIOC NATIONAL IRANIAN OIL : IPC Woos International Firms
01:51a DEPA : discloses Union Insurance Company PSC shareholding increase
01:36a EFD EUROPE OF FREEDOM & DEMOCRACY : More transparency in transatlantic trade talks
01:35a AVIC : to Acquire AIM Aviation (AIM Altitude) from TowerBrook Capital
01:31a OOREDOO : wins 5 Stevie Awards for Women in Business
01:24a KUWAIT FINANCE HOUSE KSC : Minister of Commerce Hails KFH’s Role in National economy
01:24a WELSH GOVERNMENT : Wales’ Health Minister calls on UK Government to ban fatty and sugary food adverts on TV before 9pm
Latest news
Hot News 
OPPORTUNITY INVEST MGMT : 27 november 2015 - Announcement AGM on 22 december 2015
ATLANTIS RESOURCES : Tidal generating firm announces long partnership for investment by Gordon Calder
CYTOTOOLS : berichtet über Ergebnisse der europäischen klinischen Studie Phase III: Resultate der Behandlung des diabetischen Fußes mit DermaPro(R) bestätigen nicht die Ergebnisse der vorangegangenen Studien (DGAP News)
EUROPA OIL & GAS : Environment Agency asked to look at Leith Hill drilling firm's finances before giving permit
IMAGINATION TECHNOLOGIES : Sir Hossein Yassaie receives 2015 Lifetime Achievement Award in annual Elektra European Electronics Industry Award...
Most Read News
11/28 Shops2Apps Launches New Service to Transfer Sites and Stores into Native Mobile Apps
11/28 SES TLMACE A S : Project of Three Boilers Denitrification in Žilina Successfully Finished
12:53a NIOC NATIONAL IRANIAN OIL : Iran Petroleum Contracts Dazzling Enough for Foreign Investors
01:24a WELSH GOVERNMENT : Wales’ Health Minister calls on UK Government to ban fatty and sugary food adverts on TV before 9pm
11/28 WAL MART STORES : Subdued local Black Friday crowd makes for enjoyable shopping experience
Most recommended articles
11/28 ECB easing, U.S. jobs data in focus
11/28DJIMF Expected to Name China's Yuan a Reserve Currency
11/28 BoE's Vlieghe says 'relaxed' about waiting to hike rates
11/28 China's shadow banking risk shifts to booming bond market
11/28DJFAA to Propose Safety Fixes for Certain Boeing and Embraer Jets