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
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
2m ago FLUXYS BELGIUM D : successful private placement of €350 million bonds
5m ago MINING PROJECTS : 27/11/2014 - New Nickel Sulphide Intersection Update
5m ago JAMMU & KASHMIR BANK : J&K Bank inaugurates 4 renovated premises in Jammu.
5m ago ENPLAS : Notice Concerning Capital and Business Alliance with DNA Chip Research Inc.( 139.78 KB)
6m ago DENTSU : Announces "2014 Hit Products in Japan"
6m ago EURONEXT :  Liquidity Agreement with Exane BNP Paribas Goes into Effect
6m ago RÉMY COINTREAU : Half-Year Results
7m ago HYUNDAI MOBIS : Researchers Submit Patent Application, "Airbag for Vehicle", for Approval
7m ago NVIDIA : Researchers Submit Patent Application, "Automatic Loop-Bandwidth Calibration for a Digital Phased-Locked Loop", for Approval
7m ago Researchers Submit Patent Application, "Display Panel and Display Device", for Approval
Latest news
Advertisement
Hot News 
FINSBURY FOOD : Strong start for Finsbury after bumper deal
BRITVIC : *ubs cuts britvic price target to 700 (740) pence - 'neutral'
PARTNERSHIP ASSURANCE : Q4 Trading To Date In Line With Forecast
MOL GLOBAL : Gainey McKenna & Egleston Announces a Class Action Lawsuit Has Been Filed Against MOL Global, Inc.
HEWLETT PACKARD : Supply of IT hardware company Hewlett-Packard, Quantity: 1 unit, Price per unit: 2900010,92rub. (VAT excluded) Total value: 2900010,92rub. (VAT...
Most Read News
1d ago GOPRO : Hero 3 Christmas Discount Covered in New Price Guide at ReelGifts.com
1d ago APPLE : Global tablets expected to slow in 2015, led by iPad shipment downturn
1d agoDJWAL MART STORES : Cuts Nearly 30 Directors and Midlevel Managers in China--Spokesman
1d ago U.S. regulator orders national Takata driver-side air bag recall
1d ago SYNERGY PHARMACEUTICALS : Announces Positive Results of SP-333 Phase 2 Trial in Patients with Opioid-Induced Constipation
Most recommended articles
10m ago AIRBUS : Lion Group set to buy ATR planes in nearly $1 billion deal
10m agoDJIndia Unlikely to Appeal Vodafone and Shell Tax Cases
11m agoDJToyota Says Takata Rupture in Japan Happened in a Toyota
16m ago Euro Vulnerable as German CPI, Draghi Commentary Looms Ahead
18m ago Timeline - Takata air bag recalls
Dynamic quotes  
ON
| OFF