Articles Tagged with Cetera Advisors

Cetera Advisors Fraud Case Rises To $21M

Two months after suing Cetera Advisors for more than $10M for allegedly defrauding retail clients, the US Securities and Exchange Commission (SEC) has amended its complaint, adding another Cetera Financial Group firm as a defendant. The regulator is now seeking $21M.

According to the amended complaint, Cetera Advisors Network, also a registered broker-dealer and investment advisor, made over $10M in undisclosed compensation that retail advisory clients paid for in fees, mark-ups, administrative fees, and revenue sharing. 

The US Securities and Exchange Commission (SEC) has filed civil charges accusing Cetera Advisors of defrauding its retail clients through $10M in unnecessary commissions and fees. The regulator is accusing the registered investment adviser (RIA) of selling these customers costlier share classes even though they qualified to invest in less expensive share classes of the same funds. The clients paid the additional compensation to the firm during the time that they held the more costly investments.

According to the Commission’s complaint, from at least 9/2016 through 12/2016, these Cetera customers were invested and held in mutual fund share classes that charged them 12b-1 fees that were recurring instead of shares that didn’t charge these fees. The SEC said that aside from the fees, which was compensation paid to Cetera, the share classes were identical.

The regulator also claims that Cetera took part in a program with its clearing firm in which the latter would share service fees and revenues it was paid from certain mutual funds with the RIA. Hence, this was incentive for Cetera to sell these mutual funds  instead of other investments to clients. Cetera purportedly received $1.7M as a result of this deal.

Former Cetera Broker Allegedly Engaged in Outside Business Activities

The Financial Industry Regulatory Authority (FINRA) announced that it is barring Nina Jessee, a former Cetera Advisors broker. The bar comes after Jessee failed to cooperate with the self-regulatory organization (SRO), which was investigating complaints about her related to alternative investments, including allegations that she had engaged in business activities that were not authorized outside of the brokerage firm.

With more than 30 years in the industry, Jessee has also been a registered broker at five other broker-dealers, including Investors Capital Corp., Financial Securities Network, NAP Financial Corporation, Marketing One Securities, and Mutual of Omaha Fund Management Company.

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