Jim Eccleston: State Actions Against Registered Investment Advisers On The Rise

Posted on November 7th, 2013 at 12:37 PM

From the Desk of Jim Eccleston at Eccleston Law Offices:

Financial advisers with $100 million or less in assets are now regulated by the states. In the past, states have been responsible for advisers with $25 million or less in assets. This expansion in oversight for the states has seen an increase in actions against registered investment advisers.

            Investment advisers now make up 23.9% of regulatory actions taken by states, and broker dealers make up 29.2%. Unlicensed individuals who sell securities are the biggest offenders making up 42.5% of these actions. Although the exact number is unclear, this increase in actions is significant enough to raise concerns. 

            Supervision is essential in ensuring advisers act appropriately. Unfortunately, the current industry shift from broker dealers to investment advisers has fostered this growth in regulatory action. More and more, advisers are leaving large firms to practice independently. This change carries a great deal of risk as solo practitioners do not have the same structure and compliance support as large financial institutions. Some of these practices may adhere to regulations and find success, but there are others who make poor investments, sometimes unknowingly, at the expense of their clients. The investment industry should heed the warnings of these trends.

The attorneys of Eccleston Law represent investors and advisers nationwide in securities and employment matters. Our attorneys draw on a combined experience of nearly 50 years in delivering the highest quality legal services.

Related Attorneys: James J. Eccleston


Return to Archive



If you find yourself in trouble with the regulators, call Eccleston Law, you won't regret it.

Rick R.


October 27, 2021
Former LPL Advisor Suspended For Completing 22 Trades Absent Client Consent

The Financial Industry Regulatory Authority (FINRA) has suspended and fined a former LPL advisor who allegedly completed 22 trades on behalf of a client without obtaining written consent. FINRA has issued a $5,000 fine and has suspended Michael Hartlett for 10 days.

October 26, 2021
Former Advisor Fails To Reverse Bar After Alleged $1 Million Theft From RBC

A former RBC Wealth Management advisor lost his bid to reverse an industry bar, according to an appellate decision issued by the Financial Industry Regulatory Authority (FINRA).

October 25, 2021
Firms Walk Thin Regulatory Line In Referring Self-Directed Clients To Advisors

While online trading platforms have surged in popularity during the pandemic, brokerage firms view self-directed investors as a source of new clients.