Header graphic for print
Securities Compliance Sentinel Analysis of cutting-edge securities industry issues

What Brokers Need to Know About Receiving Cash Fees

Posted in Broker-Dealer Regulation, Investment Adviser Regulation, No-Action Relief, SEC Enforcement

The SEC’s Division of Investment Management allowed a sanctioned broker-dealer official to be paid a cash solicitation fee from a RIA.  See J.P. Turner & Co. LLC, SEC No-Action Letter, avail. 9/10/12, and http://www.sec.gov/divisions/investment/noaction/2012/jpturner091012-206-4.pdf.

The SEC Staff allowed the cash fees because the sanctioned official was not engaged in cash solicitation activities in his individual capacity.  The SEC Staff granted the relief noting the firm will conduct any cash solicitation arrangement in compliance with IA Rule 206(4)-3, and will comply with the terms of the administrative order for 10 years. 

This broker has to follow the SEC rules to permit this individual to receive cash fees, any other approach would be a serious violation.