INVESTORS: Intervest International Equities Corporation broker Craig Lee Carson was ordered to cease and desist by the SEC in connection with breaches of fiduciary duties.
Craig Lee Carson (CRD#: 41892) is registered as a broker with Intervest International Equities Corporation, Inc., where she has been employed since 2021. Previously, Carson was registered as a broker and investment adviser with Cabot Lodge Securities from 2009 until 2021.
Carson has eighteen disclosures on his BrokerCheck report. One customer dispute filed against Carson was withdrawn and two customer disputes were denied. Carson has only received three disclosures in the past 20 years.
March 2022 Customer Dispute
Allegations: Client claims inappropriate sales of L-bonds and Preferred Stock of GWG.
Damage Amount Requested: $300,000.00
June 2021 Regulatory Judgment
Initiated By: United States Securities and Exchange Commission
Allegations: The Securities and Exchange Commission (“Commission”) deems it appropriate and in the public interest that public administrative and cease-and-desist proceedings be, and hereby are, instituted pursuant to Section 15(b) of the Securities Exchange Act of 1934 (“Exchange Act”) and Sections 203(e), 203(f), and 203(k) of the Investment Advisers Act of 1940 (“Advisers Act”) against Intervest International, Inc. (“Intervest”) and Craig L. Carson (“Carson”) (collectively, “Respondents”). The Commission finds that these proceedings arise out of breaches of fiduciary duty by registered investment adviser Intervest International, Inc. (“Intervest”) and one of its investment adviser representatives (“IAR”) Craig L. Carson (“Carson”) in connection with recommendations and purchases of certain unit investment trusts (“UITs”) and Class A shares of certain mutual funds and an interval fund (“Funds”). First, from at least April 14, 2016, through August 8, 2019, Carson recommended and purchased “standard” UIT units (“Standard Units”) bearing transactional sales charges on behalf of Intervest advisory client accounts even though the accounts were eligible to purchase identical “Fee Account Unit” versions of the UITs that bore no transactional sales charges. Second, from at least May 19, 2016, through August 28, 2019, Carson recommended and purchased certain Funds on behalf of Intervest advisory client accounts that charged front-end sales loads (“Fund Class A shares”) even though the accounts were eligible to purchase the Funds’ Class A shares without the sales loads (“load-waived Class A shares”). As a result of the accounts’ purchases of the more expensive Standard Units and Fund Class A shares, the accounts collectively paid approximately $378,295.36 in avoidable transaction costs, all of which Intervest International Equities Corporation (“IIEC”), Intervest’s wholly-owned subsidiary and the introducing broker on the transactions, collected as commissions. IIEC passed 70% of that amount to Carson as its registered representative. However, Intervest and Carson failed to disclose the resulting conflicts of interest associated with these practices, including that the advisory client accounts were otherwise eligible to purchase the less expensive Fee Account Units and Fund load-waived Class A shares, and they also breached their duty to seek best execution for those transactions. As a result, Intervest and Carson willfully violated Section 206(2) of the Advisers Act.
Sanctions: Cease and Desist
Sanctions: Civil and Administrative Penalty(ies)/Fine(s)
Sanctions: Monetary Penalty other than Fines
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