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Twenty-one investment advisers and six broker-dealers agreed to settle SEC charges for failing to file and deliver in a timely fashion their client or customer relationship summaries (i.e., Forms CRS). All of the firms found in violation failed to either file and deliver Form CRS to retail investors or post the information to their respective websites by the applicable deadlines.
The SEC adopted Form CRS on June 5, 2019, and it required investment advisers and broker-dealers registered with the SEC to (i) file their respective Forms CRS with the SEC, (ii) deliver Form CRS to prospective and new retail investors by June 30, 2020, (iii) deliver Form CRS to existing retail investor clients or customers by July 30, 2020, and (iv) post their current Form CRS "prominently" on the firm website (if one exists).
As a result of the conduct, the SEC found the investment advisers in violation Section 204 of the Advisers Act, and Rules 204-1 and 204-5 thereunder. The broker-dealers were found in violation of Section 17(a)(1) of the Exchange Act and SEA Rule 17a-14.
The firms settled with the SEC by agreeing to (i) a censure, (ii) cease and desist from the listed violations, and (iii) pay civil penalties ranging from $10,000 to $97,523.
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