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On September 17, 2019, the SEC announced that it had settled administrative proceedings against three affiliated investment advisers for allegedly charging advisory fees on inactive retail client accounts and charging excess commissions for brokerage customer investments in certain unit investment trusts (UITs). The SEC alleged that the advisers failed to consistently perform promised, ongoing suitability reviews of inactive client accounts and, as a result, failed to move client assets to lower-fee brokerage accounts, in violation of the policies and procedures described in its Form ADV Part 2A brochures. The SEC also alleged that the advisers recommended that clients accelerate the frequency of UIT transactions, resulting in the payment of additional sales charges and processing fees, without adequately determining whether these recommendations were suitable. The SEC further alleged that the advisers misapplied pricing data to UIT positions held by advisory clients and failed to apply available sales charge discounts to certain clients’ purchases of UITs, causing clients to overpay fees. Without admitting or denying the allegations, the three advisers agreed to be censured; to cease and desist from future violations; to disgorge over $11 million of allegedly inappropriate client advisory fees and UIT commissions, plus over $1 million in interest, which the advisers will return directly to affected clients; and to pay a $3 million civil penalty.

Read the SEC order here.


Jacob C. Tiedt


John S. Marten


Nathaniel Segal