The Securities and Exchange Commission has obtained a final judgment against two entities of Cetera that it previously charged with defrauding retail advisory clients of $21 million by failing to disclose several sources of compensation.
The U.S. District Court for the District of Colorado entered the judgement yesterday against Cetera Advisors LLC and Cetera Advisor Networks LLC, ordering them to jointly pay disgorgement of $5,614,509, plus prejudgment interest of $990,961; and $1 million each in civil penalties. It also permanently enjoined them from violating the Investment Advisers Act of 1940.
The SEC in August 2019 had initially charged Cetera Advisors LLC with breaching its fiduciary duty and defrauding its retail advisory clients, generating $11 million in undisclosed compensation. It later amended the complaint to include Cetera Advisor Networks, whom it said reaped more than $10 million in undisclosed compensation from the scam, bringing the total alleged unlawful gains to $21 million.
Cetera issued the following statement in response to the judgment: “This is an industry-wide issue that has been discussed for many years. Cetera revised its disclosures several years ago, and fully cooperated with the SEC throughout the course of this matter. We are pleased to have resolved…
