Cetera Investment Services (CRD#: 15340) is a FINRA regulated brokerage firm that is headquartered in St. Cloud, Minnesota. This broker-dealer is currently licensed to operate in 53 states and U.S. territories.
As of July of 2018, FINRA lists 10 disclosures on the BrokerCheck report of Cetera Investment Services. These disclosures include eight regulatory events and two FINRA arbitration proceedings. Here, our securities fraud lawyers highlight some of the most notable recent FINRA disclosures related to Cetera Investment Services.
FINRA Actions and Investor Complaints: Cetera Investment Services
Inadequate Oversight of Individual Broker’s Outside Business Activities
As reported by InvestmentNews.com, the Financial Industry Regulatory Authority (FINRA) has censured Cetera Investment Services and fined the brokerage firm $200,000 for its failure to regulate the outside business activities of its individual securities representatives. Registered brokerage firms can be held financially liable for their failure to supervise securities representative.
FINRA reports that between 2012 and 2014, Cetera Investment Services failed to establish and carry out an adequate supervisory system to ensure that its brokers’ outside business activities would not compromise the company’s duty to provide legitimate, non-conflicted investment guidance to its clients.
The specific issue that prompted this enforcement action related to former Cetera broker Alex P. Anderson (CRD#: 4243107). In 2015, Mr. Anderson was barred from the securities industry after he obtained the power of an attorney for a 94-year-old client and converted at least $75,500 from her brokerage account for his own personal use.
Failure to Apply Available Front-End Sales Charge Waivers
In August of 2017, FINRA sanctioned Cetera Investment Services for its failure to apply available front-end sales charge waivers to certain mutual fund purchases. As a result of its failure to do so, some of the firm’s customers were forced to pay materially higher fees than were necessary for some mutual fund investments.
Without admitting to or denying wrongdoing, Cetera Investment Services agreed to pay affected customers more than $1.3 million in financial restitution. In addition, FINRA recognized that the firm made an extraordinary effort in cooperating with the investigation and in rectifying the alleged misconduct.
Failure to Notify Customers Regarding Material Changes to their Account
Registered brokerage firms have a basic duty to provide certain information to their customers and to act with a certain level of transparency. In July of 2016, FINRA sanctioned Cetera Investment Services and fined the firm $75,000 for its failure to provide written notification to at least 57,000 investors regarding material changes to their account records. FINRA assessed that this brokerage firm did not have a proper supervisory system in place to ensure to ensure the accurate maintenance of account records. Without admitting or denying wrongdoing, Cetera consented to the FINRA’s proposed penalties.
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