According to a recent InvestmentNews report, Cetera Financial Group quietly announced, via SEC filings, costs of $4.2 million in fines, penalties, and disgorgement in the wake of regulatory action and an SEC investigation into faulty mutual fund sales at the firm.
The financial statements filed with the SEC indicate that Cetera Advisors estimates $1.7 million in costs—fines, penalties, interest, and disgorgement—related to the investigation while Cetera Advisor Networks estimates $2.5 million in costs, for a total of $4.2 million at these Cetera Financial Group broker-dealers.
According to the SEC's 2019 complaint against Cetera Advisors alleging fraud, the firm failed to act in its clients' best interests in its mutual fund business and failed to disclose a conflict of interest in which a third party paid Cetera for certain mutual funds that were not always in its client's best interests.
Cetera also allegedly directed the third-party clearing broker to mark-up certain fees by up to 300%, which was a cost passed onto Cetera's advisory clients.
Cetera's disciplinary woes aren't just confined to the SEC's mutual fund investigation and charges of breaching fiduciary duty and fraud.
In January 2021, FINRA fined a group of Cetera broker-dealers, including Cetera Advisors Networks in El Segundo, California and Cetera Advisors in Denver, Colorado a total of $1 million for failing to supervise brokers who conducted private securities transactions away from the firm, and for continuing to fail to supervise transactions even though the firm purportedly knew about the deficiencies.
Even prior to this, FINRA fined Cetera $1.4 million for violations and failures concerning broker Mark Charles Koehler's unsuitable and excessive trading of Class A mutual funds in elderly customer accounts, resulting in hundreds of thousands of dollars in losses.
In February 2021, Cetera announced plans to buy Voya Financial Advisors and its related brokerage assets, appearing to continue its plan to expand all while regulators continue to cite Cetera for increased supervisory failures and similar violations.
If you have invested with a stockbroker or financial adviser at Cetera Advisors or another Cetera Financial Group broker-dealer whose unsuitable recommendations, misrepresentations, or omissions of material facts, such as mutual fund fees or other liabilities resulting in losses have proven harmful to your investments or interests, please call an experienced FINRA arbitration attorney at The Law Offices of Jonathan W. Evans & Associates at (800) 699-1881 for an investigation and consultation.