Case Law Alerts
SEC settles undisclosed fee charges with a Wisconsin registered investment adviser.
Landaas & Co. is a dual registered investment adviser and broker-dealer based in Milwaukee, Wisconsin. The SEC alleged that over an eight-year period, beginning in 1999, Landaas and its principal received undisclosed fees. Specifically, Landaas’s clearing broker charged a $20 mark-up labeled a clearing broker fee, part of which was returned to the broker. Landaas misrepresented the payment of this fee to its customers. Landaas also received fees from the clearing broker in connection with no-transaction-fee mutual funds, which were not disclosed to customers. The order alleged violations of Advisers Act sections 206(2), 206(4) and 207, which generally prohibit registered investment advisers from issuing fraudulent, deceptive or misleading statements to customers. The firm agreed to implement a series of undertakings, including retaining an independent consultant and paying disgorgement of $408,483.06, prejudgment interest of $60,458.14 and a penalty of $130,000. Registered investment advisers owe a fiduciary duty to their customers and must accurately and completely disclose all compensation and material conflicts of interest to customers. Undisclosed fees and conflicts of interest are high priorities for the SEC and states in regulating the registered investment adviser industry.
Case Law Alerts, 1st Quarter, January 2019
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