More On Legal & Compliancefrom The Advisor's Professional Library
- Use and Misuse of Social Media Social media is an inexpensive and effective way to communicate with established and prospective clients. Nevertheless, when RIAs utilize social media to promote their advisory practices, they risk compliance problems for their firms.
- Anti-Fraud Provisions of the Investment Advisers Act RIAs and IARs should view themselves as fiduciaries at all times, whether they meet the legal definition or not. Deviating from the fiduciary standard of full disclosure while courting clients may cause the advisor significant problems.
Investment advisor Sandra Venetis of Branchburg, New Jersey, and three of her firms have been charged by the Securities and Exchange Commission (SEC) with operating a multimillion-dollar offering fraud that involved the sale of phony promissory notes to investors, many of whom are retired or unsophisticated in investments
Venetis, whose Form ADV reflects that she is registered in four states, was charged, along with Systematic Financial Associates, Inc., Systematic Financial Services, LLC, and Systematic Financial Services, Inc., with unregistered sales of securities in violation of the Securities Act of 1933 and with violations of the antifraud provisions of the Securities Act and the Securities Exchange Act of 1934.
The SEC alleges that Venetis made false promises to clients and others, using worthless documents and the lure of a return of 6% to 11% interest on funds that she then appropriated and used to pay for business and gambling debts, international travel, gambling, and property taxes and mortgages; she is also alleged to have channeled some of these funds to relatives.
Venetis has settled with the SEC on all charges, although the settlement is not final until approved by the court.