Member access

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
Recommend:
0
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
Recommend :
0
React to this article
Latest news
Date Title
3m ago WORLD REACH : August 1st 2014 - Change of Interest of Substantial Holder
3m ago BREADTALK : Joint Venture Agreement To Invest In BTM (Thailand) Ltd
3m ago LIVE INCORPORATION PCL : Report on the utilization of the increased capital
3m ago MOBIL'NYE TELESISTEMY : MTS Announces Decisions of its Board of Directors
3m ago LIQUEFIED NATURAL GAS : Appendix 3Y - Change of Director's Interest Notice x 2
3m ago VAAHTO : lowers its 2014 forecast
3m ago DEUTSCHE LUFTHANSA : Fanhansa Siegerflieger goes into extra time
3m ago VAAHTO : The CEO of Vaahto Group Plc Oyj will change
3m ago REXAM : rises as can maker sees boost from World Cup
3m ago On the web
Latest news
Advertisement
Hot News 
MTY NV : ASML - Update on Performance of NXE: 3300B EUV System at Customer Site
AXA PROPERTY : Notification of Major Share Interest
ADIDAS : Man United issue Champions League warning
DEUTSCHE LUFTHANSA : Lufthansa Group raises operating profit for first half-year
ARKEMA : 2Q Disappoints
Most Read News
1d ago TESLA MOTORS : expects to boost 2015 output to more than 60,000
1d ago PUBLIC STORAGE : Reports Results for the Quarter Ended June 30, 2014
1d ago PANASONIC : Tesla expects to boost 2015 output to more than 60,000
1d ago MOODY : upgrades Suncor to A3
4h agoDJARKEMA : 2Q Disappoints
Most recommended articles
1d agoDJMARKET SNAPSHOT : U.S. Stocks: Futures Drop On Jobless Claims
3m agoDJEuro-Zone Manufacturers Cut Jobs in July
3m agoDJUK Manufacturing Growth Weakest for a Year
6m ago DIRECT LINE INSURANCE : says in talks to sell German, Italian units
10m agoDJEuro-Zone Manufacturers Cut Jobs in July
Dynamic quotes  
ON
| OFF