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SEC Fines Disciplined Capital Management $25K Over Form CRS Failures

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What You Need to Know

  • The firm was ordered to pay a $25,000 civil money penalty.
  • It missed its regulatory deadlines.
  • The firm failed to deliver Form CRS to its retail investor clients and failed to post the form on its website.

The Securities and Exchange Commission on Wednesday ordered Disciplined Capital Management LLC to pay a $25,000 civil money penalty for failing to file a Customer Relationship Summary (Form CRS) with the agency and to deliver the form to clients by its regulatory deadlines.

According to the order, DCM was required to file its initial Form CRS with the commission as Part 3 of its Form ADV and to begin delivering the form to prospective and new retail investor clients, as applicable, by June 30, 2020.

DCM was further required to deliver its Form CRS to retail investor clients by July 30, 2020.

“The firm failed to file and deliver Form CRS by these deadlines, not becoming compliant until in or after late March 2021,” the order states. “As a result, DCM violated Advisers Act Section 204 and Rules 204-1 and 204-5 thereunder.

DCM began complying only after the Division of Examinations contacted the firm regarding the failure to file its Form CRS, the order states.

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Specifically, the exam division contacted DCM’s chief compliance officer by email on Oct. 14, 2020, to alert her that the firm had failed to file Form CRS, the SEC said.

“DCM, however, still did not file its Form CRS. On Jan. 28, 2021, the exam division again contacted DCM but this time to announce an examination relating to the firm’s failure to file Form CRS.

DCM finally filed Form CRS with the commission on March 30, the SEC states.

The firm also did not deliver Form CRS to its retail investor clients and failed to post Form CRS on its website until March 2021.

In late July, 21 investment advisors and six broker-dealers agreed to settle charges that they failed to file and deliver their client or customer relationship summaries to their retail investors in a timely manner.