More On Legal & Compliancefrom The Advisor's Professional Library
- Code of Ethics Rule The Code of Ethics Rule, found in Rule 204A-1, uses severe consequences for violation to help ensure investment advisors will do the right thing.
- Client Commission Practices and Soft Dollars RIAs should always evaluate whether the products and services they receive from broker-dealers are appropriate. The SEC suggested that an RIAs failure to stay within the scope of the Section 28(e) safe harbor may violate the advisors fiduciary duty to clients, so RIAs must evaluate their soft dollar relationships on a regular basis to ensure they are disclosed properly and that they do not negatively impact the best execution of clients transactions.
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.