U.S. securities regulators have sanctioned three investment advisory firms for repeatedly ignoring problems with their compliance programs.
The U.S. Securities and Exchange Commission (SEC) said Wednesday it sanctioned three firms – Modern Portfolio Management Inc., Equitas Capital Advisers LLC, and Equitas Partners LLC – in settlements that will see them pay financial penalties and agree to hire compliance consultants.
The SEC says that the enforcement actions arise from its program that targets firms that have been previously warned by SEC examiners about compliance deficiencies but failed to effectively act upon those warnings.
“The Compliance Program Initiative is designed to address repeated compliance failures that may lead to bigger problems,” said Andrew Ceresney, co-director of the SEC’s division of enforcement.
“That risk materialized with these firms, whose compliance programs were not adequate to prevent misleading statements in marketing materials or inadvertent overbilling of clients. Firms must not only have policies and procedures in place, but also need to properly implement those policies and procedures,” he added.