SEC Fines PNC Investments LLC, Securities America Advisors Inc., and Geneos Wealth Management Inc. $15 Million for Breaching Fiduciary Duties and Failing to Disclose Conflicts of Interests
Posted on Wednesday, May 2nd, 2018 at 8:20 pm
Erez Law is currently investigating PNC Investments LLC (PNCI), Securities America Advisors Inc. (SAA), and Geneos Wealth Management Inc. (Geneos) financial advisors across the country regarding investment losses.
In April 2018, the Securities and Exchange Commission (SEC) charged PNCI, SAA, and Geneos with breaching fiduciary duties to clients and generating millions of dollars of improper fees in the process. The three brokerage firms violated their duty to seek best execution by investing their advisory clients in higher-cost mutual fund shares when lower-cost shares of the same funds were available. The firms will pay almost $15 million, with more than $12 million going to affected clients.
According to the SEC’s orders, PNCI and Geneos failed to disclose the conflict of interest associated with compensation they received from third parties for investing clients in particular mutual funds. PNCI also improperly charged advisory fees to client accounts for periods when there was no assigned investment advisory representative. The SEC also charged Geneos for failing to identify its revised mutual fund selection disclosures as a “material change” in its 2017 disclosure brochure.
The three brokerage firms consented to a cease-and-desist order and a censure. The SEC orders require PNCI to pay $6,407,770 in disgorgement and prejudgment interest and a $900,000 penalty. SAA is to pay $5,053,448 in disgorgement and prejudgment interest and a $775,000 penalty. Geneos is to pay $1,558,121 in disgorgement and prejudgment interest and a $250,000 penalty.
According to the SEC, eligible advisers have until June 12, 2018 to self-report similar misconduct and take advantage of the enforcement division’s willingness to recommend more favorable settlement terms, including no civil penalties against the adviser.
Pursuant to FINRA Rules, member firms are responsible for supervising a broker’s activities during the time the broker is registered with the firm. Therefore, PNC Investments LLC, Securities America Advisors Inc., and Geneos Wealth Management Inc. may be liable for investment or other losses suffered by its customers.
Erez Law represents investors in the United States for claims against brokers and brokerage firms for wrongdoing. If and have experienced investment losses, please call us at 888-840-1571 or complete our contact form for a free consultation. Erez Law is a nationally recognized law firm representing individuals, trusts, corporations and institutions in claims against brokerage firms, banks and insurance companies on a contingency fee basis.