The Securities & Exchange Commission (SEC) has charged 12 financial firms for failing to file and deliver client or customer relationship summaries – known as Form CRS – to their retail investors by the required deadline and/or failed to include all the necessary information.
Of the 12, six are investment advisory firms and the remaining six are broker-dealers.
All companies have agreed to settle the charges.
The firms in question are:
- Banyan Securities; Church, Gregory, Adams Securities Corporation; K. Financial Services; and The Winning Edge Financial Group. have agreed to pay a $10,000 civil penalty;
- Arthur Zaske & Associates and NVNG Investments, have agreed to pay a $15,000 civil penalty;
- Gutt Financial Management; Hinsdale Associates; Personal Financial Planning; Stone Run Capital; and Watermark Securities have agreed to pay a $25,000 civil penalty;
- While Wall Street Access agreed to pay a $97,523 (£71,906, €85,283) civil penalty.
Sanjay Wadhwa, deputy director of the SEC’s enforcement division, said: “With today’s actions, the SEC has now charged forty-two financial firms for failing to meet the obligations that are required to ensure retail investors understand their relationships with their securities industry professionals.”
“We urge firms that continue to be delinquent in fulfilling their Form CRS obligations to come into compliance with the law and to self-report to the SEC.”
Regulatory action
In July 2021, the SEC charged another 27 firms – 21 advisers and six broker-dealers – for the same regulatory breaches.
Form CRS was first introduced in 2019 to require registered investment advisers (RIAs) and broker-dealers to file and provide retail investors with client or customer relationship summaries.
The SEC also requires companies with a website to post their forms online as well.
