Three investment firms – PNC Investments, Securities America Advisors Inc., and Geneos Wealth Management Inc. – have settled with the Securities and Exchange Commission (SEC) over charges related to breach of fiduciary duty.
According to the SEC, the three firms neglected their fiduciary duties to clients and generated millions of dollars of improper fees. The firms will pay more than $12 million directly to harmed clients.
Firms Fail to Disclose Conflicts of Interest to Clients
The advisory arms of PNC, Securities America and Geneos failed to disclose conflicts of interest with clients when advisors invested clients in higher-cost mutual fund shares when a lower-cost share of the same funds was available. As a result, investors paid excessive fees.
In addition to breaching fiduciary duty, the SEC charged Geneos with failing to identify its revised mutual fund selection disclosures as a "material change" in its 2017 disclosure brochure.
Firms to Pay Disgorgement and Prejudgment Interest
The SEC has ordered PNCI to pay $6,407,770 in disgorgement and prejudgment interest along with a $900,000 penalty; Securities America is required to pay $5,053,448 in disgorgement and prejudgment interest along with a $775,000 penalty, and Geneos will pay $1,558,121 in disgorgement and prejudgment interest along with a $250,000 penalty.
As a result of the settlement, the SEC is encouraging eligible firms to participate in the recently announced Share Class Selection Disclosure Initiative. The initiative gives eligible advisors until June 12, 2018, to self-report misconduct and take advantage of the more favorable settlement terms offered by the SEC’s enforcement division, including no civil penalties against the advisor.
Are You a Victim of Stockbroker Misconduct?
Do you believe you are a victim of stockbroker misconduct or think you lost money as a result of your investment advisor at Securities America? You may have certain legal rights that require your immediate attention.
Contact an Investment Fraud Attorney Today
If you are looking for an investment fraud lawyer to review your rights and options, schedule a FREE consultation to review your rights and options with Dimond Kaplan & Rothstein, P.A. today.
Our firm has recovered more than $100 million from banks and brokerage firms for clients. We may be able to help you recover your investment losses.
DKRPA maintains offices in Los Angeles, New York, West Palm Beach, Miami, and Detroit and we also travel nationwide. Contact us to meet with one of our experienced investment fraud attorneys today.
