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.
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To learn more about the firm’s recent claims against Cetera, please see: FINRA Lawsuit filed against Cetera Advisors involving Unsuitable Investments
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Tags: Cetera Advisor Networks SEC charges, Cetera Advisors, Cetera Advisors complaints, Cetera Advisors FINRA lawsuit, Cetera Advisors investigation, Cetera Advisors investor disputes, Cetera Advisors lawsuit Last modified: October 25, 2022