Two Firms Charged With Compliance Failures in Wrap Fee Programs
From the Desk of Jim Eccleston at Eccleston Law LLC:
The Securities and Exchange Commission has settled charges alleging violations of Section 206(4) of the Investment Advisers Act of 1940 and Rule 206(4)-7 with Raymond James & Associates (“Raymond James”) and Robert W. Baird & Company (“Baird”). Without admitting or denying the charges, Raymond James agreed to pay a $600,000 penalty and Baird agreed to pay a $250,000 penalty.
In its complaint, the SEC alleged that both companies failed to monitor and disclosure the amount of commissions that their clients were charged when sub-advisers “traded away” with a broker-dealer outside the wrap fee programs. Without this information, clients of Raymond James and Baird were not aware the additional fees they were incurring.
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