Action against Respondent, an investment adviser, for alleged failure to supervise an investment adviser representative (“IAR”) who engaged in cherry-picking.  According to the SEC, Respondent failed to implement a procedure to prevent conflicts of interest that required IARs to pre-clear and obtain written approval before trading in their personal accounts.  The SEC further alleges that Respondent’s code of ethics in its Forms ADV was misleading during the relevant period because it stated that Respondent had a pre-clearance procedure for IARs’ personal trading and that the firm required all transactions be carried out in a way that put its clients’ interest before its employees’.  Respondent has agreed to pay a civil penalty of $100,000.

SEC Complaint

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