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Osaic Wealth, Affiliate BDs Broke Custody Rule: SEC


What You Have to Know

  • Every didn’t receive verification by an impartial public accountant of shopper funds and securities of which the companies had custody.
  • The SEC hit every agency with a $100,000 penalty.

The Securities and Trade Fee stated Friday that it has fined Osaic Wealth and its affiliate broker-dealer companies — SagePoint Monetary, Woodbury and FSC Securities — for violating the company’s custody rule.

Previously Advisor Group, Osaic Wealth consolidated its eight impartial broker-dealers on June 21.

In line with the SEC orders, from June 2017 to December 2022, Osaic Wealth and the three broker-dealers every didn’t receive verification by an impartial public accountant of shopper funds and securities of which the companies had custody.

Every agency was ordered to pay a $100,000 penalty.

Osaic Wealth used a kind settlement to control sure features of the connection amongst Osaic Wealth, its shoppers, and a clearing agent Osaic Wealth used, the SEC order said.

“Every of those agreements included a margin account settlement that contained language, required by the Clearing Agent, that permitted the Clearing Agent to simply accept, with out inquiry or investigation, any directions given by Osaic Wealth regarding these shoppers’ accounts.”

As a consequence of Osaic Wealth “having this authority with respect to the shopper funds and securities within the Affected Accounts, Osaic Wealth had custody of those property,” the SEC stated.

As a result of Osaic Wealth “didn’t receive verification by precise examination of the shopper funds and securities” within the affected accounts by an impartial public accountant, Osaic Wealth violated Part 206(4) of the Advisers Act and Rule 206(4)-2 thereunder, generally known as the custody rule.

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