Investment Advisor Sued by SEC for Fraud by Overcharging Advisory Fees
The Securities and Exchange Commission (“SEC”) charged Stephen Brandon Anderson and his company, River Source Wealth Management, an RIA located in North Carolina alleging the firm systematically overcharging his clients. The SEC alleges that the Anderson charged approximately 40% more than the agreed-upon maximum customer advisory fees. The SEC said that Anderson also misled his clients about the reason he transferred their assets from River Source’s long-time asset custodian, falsely stating that it was his decision and that the separation was “amicable.” In fact, as the order states, the asset custodian ended the relationship with River Source after it noticed irregular billing practices and failed to receive sufficient supporting documentation from Anderson.
The SEC’s order finds that Anderson violated Sections 206(2) and 207 of the Investment Advisers Act, and aided and abetted and caused River Source’s violations of the books and records and compliance provisions of the Advisers Act. Anderson agreed to a cease-and-desist order and a censure. He agreed to pay disgorgement and prejudgment interest of $405,381 and a $100,000 penalty. For the press release, please visit sec.gov.
In a complex business environment with increased regulatory scrutiny around governance issues and stringent demands, Kennyhertz Perry brings a sophisticated understanding of the impact of these regulations on business and work with clients to identify and mitigate the risks of potential enforcement actions, navigate the complexity of the regulated world, and head off compliance issues before they arise.
Kennyhertz Perry represents individual and corporate clients faced with the increased use of criminal enforcement to address business practices, particularly as they relate to financial issues. Mr. Perry brings his enforcement experience as well as his substantial prior experience in white-collar criminal defense practice, and as a firm, we represent corporate clients and individual officers and directors at every stage of government investigations and enforcement actions – including white collar criminal matters – initiated by state and federal agencies, including the Department of Justice, SEC, CFTC, FTC, and FINRA.
Kennyhertz Perry’s enforcement practice regularly defends clients against allegations involving a wide array of business contexts in federal and state grand jury investigations, trials, and appeals. In particular, we have represented clients in enforcement matters and related litigation involving a wide range of subject areas including Foreign Corrupt Practices Act (FCPA), consumer financial services, money laundering and Bank Secrecy Act, securities, commodities, options, and derivatives fraud, state and federal RICO laws, False Claims Act, and insurance fraud.
Kennyhertz Perry, LLC is a business and litigation law firm representing clients in highly regulated industries. The firm was founded by two veteran Kansas City attorneys, John Kennyhertz and Braden Perry. To learn more about the firm, visit kennyhertzperry.com.
*The choice of a lawyer is an important decision and should not be based solely upon advertisements.