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Advisory Firms Sanctioned for Compliance Program Deficiencies

Wednesday, November 13, 2013

On October 23rd, as part of the SEC’s Compliance Program Initiative, the SEC has announced the sanctioning of three advisory firms and their officers. All three firms have agreed to settlements and to hire compliance consultants. The SEC National Exam Director Andrew Bowden stated “After SEC examiners identified significant deficiencies, these firms did little or nothing to address them by the next examination. Firms must fix deficiencies identified by our examiners.”

The SEC sanctioned Modern Portfolio Management and its owners G. Thomas Damasco II and Bryan Ohm for a total of $175,000 in penalties, due to failure to complete annual compliance reviews in 2006 and 2009, and for misleading statements in their investor brochure and website.

The SEC sanctioned Equitas Capital Advisors LLC, Equitas Partners LLC, owner David S. Thomas Jr., and former chief compliance officer Stephen Glisclair for a total of $225,000 in penalties, for failing to adopt and implement written compliance policies and procedures and conduct annual compliance reviews, as well as making misleading disclosures and inadvertent overbilling. The Equitas firms made false and misleading disclosures about conflicts of interest, compensation, and historical performance. To read the full story please click here.

If you have any questions about this article or want to make certain your compliance policies and procedures will stand up to an audit, please call Red Oak Compliance today. We are here to help.

About Red Oak Compliance Solutions

Red Oak Compliance Solutions is the global advertising review software of choice in the financial services industry. It is a comprehensive suite of SEC 17A-4 compliant features that are 100% books and records compliant and provides clients with 35% faster approvals and 70% fewer touches or better. We also offer Smart Review(SM), which solves for the storage and maintenance of disclosures, helping firms reduce risk, decrease review times, and increase the speed of distribution of marketing materials. Smart Registration(SM) automates the licensing and registration management process to help reduce regulatory risk and time spent on manual processes. Overall, Red Oak allows firms to minimize risk, reduce costs, and increase compliance review process effectiveness and efficiencies.

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