Missouri RIA Charged with Breaching Fiduciary Duty
The SEC fined a registered investment adviser, SignalPoint Asset Management (“SAM”), a total of $215,000 for breach of fiduciary duty by failing to disclose conflicts of interest to clients.
SAM is a Missouri headquartered in Springfield, Mo., serving as an investment adviser to more than 1,800 separately managed accounts with combined assets under management of approximately $526 million.
The firm's principals provided brokerage and advisory services as both registered representatives and investment adviser representatives of an unnamed, dually registered broker-dealer and investment adviser.
During 2007 and early 2008, the firm’s principal sought permission from the dual registrant to form and own a separate investment advisoryfirm. After the dual registrant denied that ownership request, the principals formed and registered SAM by selecting three nominee owners to act as SAM's majority members.
The principals provided all initial capital and, from August 2008 through 2013, actively controlled SAM. However, in advising some of their advisory clients to invest with the firm, they failed to disclose their control along with their conflicts of interest associated with their capitalization and potential profits.In addition, their Form ADVs failed to disclose the principals as control persons.
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