Action against Respondent, a registered investment adviser and broker-dealer, for alleged  failure to disclose a conflict of interest in the portfolio manager evaluation process used to recommend terminations for over fifteen hundred of its retail advisory account.  The SEC alleges that Respondent’s due diligence unit recommended the termination of certain products in which Respondent’s retail advisory clients had invested approximately $575 million and which was managed by a U.S. subsidiary of a foreign bank.  The SEC further alleges that the subsidiary learned of the recommendation and contacted one of Respondent’s senior executives to argue against the decision, after which it was deferred.  According to the SEC, Respondent’s failure to inform its clients of this communication represented a conflict of interest.  Respondent has agreed to pay disgorgement of $4,032,871.89, prejudgment interest of $806,981.03, and a civil penalty of $4,032,871.89.

SEC Order 

SEC Press Release