SEC Charged North-Carolina’s Financial Adviser with Defrauding Clients by Overcharging Advisory Fees

Posted on June 11th, 2019 at 5:34 PM
SEC Charged North-Carolina’s Financial Adviser with Defrauding Clients by Overcharging Advisory Fees

From the Desk of Jim Eccleston at Eccleston Law LLC:

The Securities and Exchange Commission (“SEC”) charged a North Carolina financial adviser Stephen Brandon Anderson with defrauding his clients by overcharging asset-based advisory fees by at least $367,000 over two years. Mr. Anderson owned and operated River Source Wealth Management in Waynesville, N.C., between November 2010 and March 2017.

According to a recent InvestmentNews article, River Source’s primary revenue stream was asset-based advisory fees. The SEC investigation found that in 2015 and 2016, Mr. Anderson “overcharged a majority of his clients.” In aggregate, the overcharging amounted to approximately 40% more than agreed-upon maximum customer advisory fees. Also, the SEC found that Mr. Anderson overstated the RIA’s assets under management by at least 18% in 2015, and by 35% in 2016, and failed to implement robust compliance policies and procedures.

The SEC order prohibits Mr. Anderson from acting in a supervisory or compliance capacity or charging advisory fees without supervision for at least three years, and requires him to provide notice of the SEC order to current and prospective clients. Mr. Anderson agreed to a cease-and-desist order, and agreed to pay disgorgement and prejudgment interest in the amount of $405,381 and $100,000 penalty.

The attorneys of Eccleston Law LLC represent investors and advisors nationwide in securities and employment matters. The securities lawyers at Eccleston Law also practice a variety of other areas of practice for financial investors and advisors including Securities FraudCompliance ProtectionBreach of Fiduciary DutyFINRA Matters, and much more. Our attorneys draw on a combined experience of nearly 65 years in delivering the highest quality legal services. If you are in need of legal services, contact us to schedule a one-on-one consultation today.

Related Attorneys: James J. Eccleston

Tags: james eccleston, eccleston law, eccleston law llc, eccleston, sec, financial advisor, river source wealth management, ria, stephen brandon anderson

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