Labor Department Fines DeWaay For Retirement Plan Recommendations
The Department of Labor (DOL) ordered financial adviser Donald DeWaay Jr. and his firms to pay $341,487 to 68 retirement plans related to some of his firm’s sales.
DeWaay owns registered investment advisory shop DeWaay Capital Management Inc., DeWaay Benefit Administrator, an employee benefits plan administrator, and defunct broker-dealer DeWaay Financial Network.
The DOL’s Employee Benefits Security Administration alleged that Mr. DeWaay, the firms he owns and a group of ex-employees allhad violated the Employee Retirement Income Security Act (ERISA) of 1974 when they recommended certain investments to clients in retirement plans between November 2004 and May 2007. In addition, DeWaay’s companies and the advisers assessed their client’s higher fees than whatinitiallyhad been agreed upon. Further, the recommendations led DeWaay, his firm and former employees to receive commissions from third parties.
DeWaay and the advisers are subject to a provision that would enjoin them from selling or recommending so-called “market alternative investments” to ERISA plans. The list of alternative investments included private-placement real estate trusts, non-traded REITS, structured products and a variety of other investments.
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