South Florida Arbitration & Litigation Lawyer Blog
Commission Charges Oregon-Based Investment Adviser for Failing to Disclose Revenue Sharing Payments
September, 2012:
The Securities and Exchange Commission recently instituted a settled administrative proceeding against two Portland, Oregon-based investment advisory firms and their owner regarding the failure to disclose a revenue-sharing agreement and other potential conflicts of interest to clients.
The SEC’s investigation found violations in three areas of the advisory business run by Christopher Keil Hicks, who owns Focus Point Solutions and The H Group. Most notably, Focus Point did not disclose to customers that it was receiving revenue-sharing payments from a brokerage firm that managed a particular category of mutual funds being recommended to Focus Point clients. Because Focus Point received a percentage of every dollar that its clients invested in these mutual funds, there was an incentive to recommend these funds over other investment opportunities in order to generate additional revenue for the firm.
Without admitting or denying the SEC’s charges, Hicks, Focus Point, and The H Group agreed to pay a combined $1.1 million to settle the case. (Rel. 2012-180)
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