Investors should know about the most recent regulatory actions filed against Cetera Investment Services. A full list of actions is described in the firm’s detailed BrokerCheck record.
SEC Censure and Fine
On August 30, 2021, the SEC filed cease-and-desist proceedings against Cetera Investment Services, alleging that the firm failed to establish written policies and procedures to protect client records and information.
The firm allegedly violated Regulation S-P, which requires firms to safeguard client information.
According to the SEC, Cetera Investment Services and its associated investment advisory firms allegedly failed to prevent and reasonably respond to cybersecurity breaches between November 2017 and June 2020. These breaches allegedly resulted in the exposure of over 4,388 clients’ personal information through their email accounts.
The SEC censured Cetera Investment Services, ordered the firm to cease and desist from violations of Regulation S-P, and fined the firm $300,000.
Fine by State of Arkansas
The Arkansas Securities Department entered a consent order with Cetera Investment Services on June 21, 2021, alleging that one of the firm’s branch offices had a designated supervisor who had not registered with the department.
The firm consented to a fine of $50,000.
Alleged Mutual Fund Overcharging
In a Letter of Acceptance, Waiver & Consent (AWC), FINRA alleged that Cetera Investment Services failed to implement a system of supervision to ensure that eligible investors who purchased mutual fund shares received applicable sales charge waivers.
Further, the firm allegedly failed to adequately train its brokers to determine clients’ eligibility for these waivers and failed to maintain written policies and procedures to assist them.
Investors were allegedly overcharged by approximately $1,220,192 in mutual fund purchases made between 2009 and 2017.
FINRA censured Cetera Investment Services and ordered the firm to pay approximately $1,391,325 in restitution (including interest).
Alleged Failure to Send Account Notices
Following an investigation, FINRA alleged that Cetera Investment Services failed to mail 57,881 notifications to account owners concerning changes to their account records.
According to an AWC, this failure was allegedly the result of an attempt to prevent clients from receiving unnecessary communications about accounts where Cetera Investment Services was no longer the broker-dealer of record.
Instead, certain clients who held both current and former accounts with Cetera Investment Services allegedly had their account communications suppressed by mistake.
FINRA further alleged that the firm failed to establish supervisory procedures to monitor the generation of account notifications.
The firm was censured by FINRA and fined $75,000.
Cetera Investment Services Brokers
You may have worked with the following brokers at Cetera Investment Services. If you lost money with any of the following financial professionals, consider speaking with a securities attorney.
