More On Legal & Compliancefrom The Advisor's Professional Library
- Trading Practices and Errors When SEC-registered investment advisors conduct annual audits of firm policies and procedures, they should pay close attention to trading practices. Though usually not required to, state-registered advisors should look at their trading practices and revise policies that do not fully protect clients.
- Advertising Advisor Services and Credentials Section 206 of the Investment Advisers Act contains the anti-fraud provision of the statute and ensures that RIAs advertising and marketing practices are consistent with the fiduciary duty owed to clients and prospective clients.
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.