HomeLife InsuranceOsaic Wealth, Associate BDs Broke Custody Rule: SEC

Osaic Wealth, Associate BDs Broke Custody Rule: SEC


What You Wish to Know

  • Each and every failed to acquire verification through an impartial public accountant of shopper price range and securities of which the corporations had custody.
  • The SEC hit each and every company with a $100,000 penalty.

The Securities and Alternate Fee mentioned Friday that it has fined Osaic Wealth and its associate broker-dealer corporations — SagePoint Monetary, Woodbury and FSC Securities — for violating the company’s custody rule.

Previously Marketing consultant Staff, Osaic Wealth consolidated its 8 impartial broker-dealers on June 21.

In step with the SEC orders, from June 2017 to December 2022, Osaic Wealth and the 3 broker-dealers each and every failed to acquire verification through an impartial public accountant of shopper price range and securities of which the corporations had custody.

Each and every company used to be ordered to pay a $100,000 penalty.

Osaic Wealth used a kind settlement to control sure facets of the connection amongst Osaic Wealth, its purchasers, and a clearing agent Osaic Wealth used, the SEC order mentioned.

“Each and every of those agreements integrated a margin account settlement that contained language, required through the Clearing Agent, that accredited the Clearing Agent to simply accept, with out inquiry or investigation, any directions given through Osaic Wealth relating to those purchasers’ accounts.”

On account of Osaic Wealth “having this authority with appreciate to the buyer price range and securities within the Affected Accounts, Osaic Wealth had custody of those property,” the SEC mentioned.

As a result of Osaic Wealth “failed to acquire verification through precise exam of the buyer price range and securities” within the affected accounts through an impartial public accountant, Osaic Wealth violated Phase 206(4) of the Advisers Act and Rule 206(4)-2 thereunder, often known as the custody rule.

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