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Written by 7:53 pm Blog, Current Investigations

Cetera to pay $7 Million for Allegedly Defrauding Advisory Clients 

Cetera to pay $7 Million for Allegedly Defrauded Advisory Clients, featured by top securities fraud attorneys, the White Law Group

SEC Obtains Final Judgment Against Cetera for charges of Defrauding Their Advisory Clients 

According to a press release on October 24, 2022, the Securities and Exchange Commission obtained a final judgment on October 13, against Cetera Advisors, LLC and Cetera Advisor Networks, LLC, whom the SEC previously charged with defrauding their advisory clients for allegedly failing to disclose several sources of compensation. 

In the United States District Court for the District of Colorado, Cetera reportedly breached their fiduciary duty and defrauded retail advisory clients by, among other things, failing to properly disclose conflicts of interest related to the firms’ receipt of compensation in the form of 12b-1 fees, revenue sharing, administrative fees, and mark-ups, according to the SEC’s amended complaint filed on October 11, 2019. 

The complaint alleged that Cetera Advisors and Cetera Advisor Networks both breached their fiduciary duty and “regularly and repeatedly put their financial interests ahead of their clients.” Collectively, the two entities reportedly received more than $21 million from breaching their fiduciary duty and defrauding their clients, according to the SEC. 

Both entities also failed to disclose that they had numerous, material conflicts of interest in providing investment advice to their clients, including that some investment choices generated millions of dollars of additional revenue for the Defendants, while other investment choices would have generated much less or no additional revenue 

The SEC reportedly ordered the two Cetera entities to pay disgorgement of $5,614,509, plus prejudgment interest of $990,961; and ordered each of them to pay a $1,000,000 civil money penalty. The final judgment resolves all of the SEC’s claims asserted in the district court litigation. 

Free Consultation with a Securities Attorney 

This information is all publicly available and provided to you by the White Law Group.For a free consultation with a securities attorney, please call the White Law Group at (888) 637-5510.

To learn more about the firm’s recent claims against Cetera, please see: FINRA Lawsuit filed against Cetera Advisors involving Unsuitable Investments 

The White Law Group, LLC is a national securities fraud, securities arbitration, investor protection, and securities regulation/compliance law firm with offices in Chicago, Illinois and Seattle, Washington. For more information, please visit our website, www.whitesecuritieslaw.com.            

     

   

Tags: , , , , , , Last modified: October 25, 2022