(HedgeCo.Net) The Securities and Exchange Commission today charged investment adviser Stephen Brandon Anderson with defrauding clients by overcharging advisory fees of at least $367,000.<\/p>\n
According to the SEC\u2019s order, Anderson owned and operated River Source Wealth Management, LLC, a now-defunct registered investment adviser in North Carolina. River Source\u2019s primary revenue stream was customer advisory fees. Customer agreements provided that those fees would be based on each customer\u2019s assets under management. The SEC\u2019s order finds, however, that in 2015 and 2016, Anderson overcharged a majority of his clients. The amount and percentages of the overcharges varied but, in the aggregate, amounted to approximately 40% more than the agreed-upon maximum customer advisory fees. As described in the order, Anderson also misled his clients about the reason he transferred their assets from River Source\u2019s long-time asset custodian, falsely stating that it was his decision and that the separation was \u201camicable.\u201d In fact, as the order finds, the asset custodian ended the relationship with River Source after it noticed irregular billing practices and failed to receive sufficient supporting documentation from Anderson. Furthermore, the order finds that Anderson made material misstatements in reports filed with the Commission, including overstating River Source\u2019s assets under management by at least $34 million (18%) in 2015 and $61 million (35%) in 2016, and failed to implement required compliance policies and procedures. The order prohibits Anderson from acting in a supervisory or compliance capacity or from charging advisory fees without supervision for at least three years, and requires Anderson to provide notice of the SEC order to clients and prospective clients.<\/p>\n
\u201cWhen advisors breach their duty to clients by misleading and overcharging them, they can expect the SEC will craft a package of remedies that will compensate harmed investors, provide additional safeguards for prospective investors, and deter similar conduct,\u201d said Carolyn M. Welshhans, Associate Director in SEC\u2019s Enforcement Division.<\/p>\n
The SEC\u2019s order finds that Anderson violated Sections 206(2) and 207 of the Investment Advisers Act, and aided and abetted and caused River Source\u2019s violations of the books and records and compliance provisions of the Advisers Act. In addition to the limitations and undertakings discussed above, Anderson agreed to a cease-and-desist order and a censure, and agreed to pay disgorgement and prejudgment interest of $405,381 and a $100,000 penalty. Payments made by Anderson pursuant to the order will be distributed to harmed investors through a Fair Fund. Anderson consented to the order without admitting or denying the findings. <\/p>\n","protected":false},"excerpt":{"rendered":"
(HedgeCo.Net) The Securities and Exchange Commission today charged investment adviser Stephen Brandon Anderson with defrauding clients by overcharging advisory fees of at least $367,000. According to the SEC\u2019s order, Anderson owned and operated River Source Wealth Management, LLC, a now-defunct […]<\/p>\n","protected":false},"author":4,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[16,3,16048],"tags":[],"class_list":["post-69458","post","type-post","status-publish","format-standard","hentry","category-hedgeco-networks-press-releases","category-hedgeco-news","category-hedgecovest-news"],"_links":{"self":[{"href":"https:\/\/www.hedgeco.net\/news\/wp-json\/wp\/v2\/posts\/69458","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.hedgeco.net\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.hedgeco.net\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.hedgeco.net\/news\/wp-json\/wp\/v2\/users\/4"}],"replies":[{"embeddable":true,"href":"https:\/\/www.hedgeco.net\/news\/wp-json\/wp\/v2\/comments?post=69458"}],"version-history":[{"count":1,"href":"https:\/\/www.hedgeco.net\/news\/wp-json\/wp\/v2\/posts\/69458\/revisions"}],"predecessor-version":[{"id":69459,"href":"https:\/\/www.hedgeco.net\/news\/wp-json\/wp\/v2\/posts\/69458\/revisions\/69459"}],"wp:attachment":[{"href":"https:\/\/www.hedgeco.net\/news\/wp-json\/wp\/v2\/media?parent=69458"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.hedgeco.net\/news\/wp-json\/wp\/v2\/categories?post=69458"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.hedgeco.net\/news\/wp-json\/wp\/v2\/tags?post=69458"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}