Log in
Login
Password
Remember
Lost password
Become a member for free
Sign up
Sign up
Settings
Settings
Dynamic quotes 

4-Traders Homepage  >  News

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
02:48a Toshiba to sell Topcon shares for 50-60 billion yen
02:47a OASMIA PHARMACEUTICAL : Notice convening the Annual General Meeting of Oasmia Pharmaceutical AB
02:47a BIOPORTO A/S : Increase of the share capital through a cash issue, private placement
02:47a SECURE PROPERTY DEVELOPMENT & INVEST : – Total Voting Rights
02:47a UNECA UNITED NATIONS ECONOMIC COMMISSION FOR AFR : Workshop to build coherence into joint programming at the sub-regional level
02:46a EMIRATES TELECOMMUNICATION : Etisalat's new DAFZA store
02:46a SCIBASE : US Reader Study shows significant improvement in detection of melanoma using Nevisense
02:46a ANOTO : Change in the total number of shares and votes in Anoto Group AB (publ.)
02:42a PANORAMA SYNERGY : Announces FY15 Results
02:42a ICHIGO REAL ESTATE INVESTMENT : Asset Acquisition
Latest news
Advertisement
Hot News 
BW OFFSHORE : Mandatory notification of trade
SHANDONG WEIGAO MEDICAL POLYMER : 31/08/2015 (1) proposed amendment to articles of association (2) proposed interi...
MBANK : Notification of transactions in securities of mBank S.A. sent by an obliged person
SALVATORE FERRAGAMO ITALIA : 2015 08 27 Press Release_1H 2015 Results
YAMAHA MOTOR : to Launch New Fino125 in Thailand, Model Featuring BLUE CORE Engine
Most Read News
08/30 Suzuki Motor says it will buy back VW stake as court settles feud
08/30 Politicians welcome Berri's call for dialogue
08/30 DATACENTRIX : Forward-thinking Western Cape government wins OpenText "Big Think" award
08/30 Tezzaron Announces World’s First Eight-Layer Active Wafer Stack
08/30 GOLDEN MEDITECH : Notice of extraordinary general meeting
Most recommended articles
02:40a Euro, Yen Rise as Jackson Hole Outcome Sends Markets Scrambling
02:32a Fund house Arabesque hires founder of U.N. sustainability programme
02:17aDJGerman Retail Sales Grow Adjusted 1.4% on Month in July
02:15aDJIliad Profit Up as Mobile Client Numbers Rise
02:10a French tax cuts will not be at expense of deficit targets - minister