SEC Files Two Proceedings Against Investment Advisers
The Commission filed two proceedings centered on investment advisers. One is based on improper fee and trading practices. The second is based on the misappropriation of funds from pooled investment vehicles by the adviser.
In the Matter of WFG Advisors, L.P., Adm. Proc. File No. 3-17320 (June 28, 2016) is a proceeding naming the registered investment adviser as a Respondent. The adviser has about $1.4 billion in regulatory assets under management. Those assets are held largely in separate accounts for over 9,900 clients. WFG represented that clients participating in its wrap account program would not be charged commissions in connection with alternative investments. Nevertheless, from January 2011 through August 2013 clients were in fact charged a commission and the advisory fee. During approximately the same period the firm also engaged in securities transactions with advisory clients on a principal basis through its broker-dealer without providing prior written disclosures or obtaining consent from the client. The firm failed to adopt policies and procedures reasonably designed to ensure that advisory fees were calculated as represented.
The order alleged violations of Advisers Act Sections 206(2), 206(3) and 207. To resolve the action Respondent agreed to certain undertakings, consented to the entry of a cease and desist order and a censure and will pay a civil penalty of $100,000.
In the Matter of Jan F. Helen, Adm. Proc. File No. 3-17319 (June 28, 2019). Respondent Helen is the sole owner of Janco Properties, the manager and investment adviser to JEP II and JEP III regarding their oil and gas investments. JEP II and JEP III were formed to invest in working interests in oil and gas exploration. Over a period of months beginning in March 2013 Respondent misappropriated $165,200 from the two entities. The misappropriation was discovered in 2014 during a regulatory review of Respondent’s then affiliated broker-dealer. The Order alleges violations of Securities Act Section 17(a), Exchange Act Section 10(b) and Advisers Act Section 206(4). The proceeding will be set for hearing.