The Florida Office of Financial Regulation (OFR) continues to aggressively target registered investment advisors in administrative complaints.
The OFR’s administrative complaints are primarily focused on alleged violations of the custody and safekeeping requirements under Florida law. In all of the cases in which I have been involved, the investment advisor is alleged to be in violation by either failing to: (1) possess written authorization from the client to deduct advisory fees, and/or (2) send the client an invoice itemizing the fees, which must include the formula used to calculate the fee, the amount of assets under management upon which the fee is based, and the time period covered by the fee.
Failure to comply with the safekeeping requirements is not only a violation in and of itself, but also causes the investment advisor to be in violation of other investment advisor laws, including net capital and the necessity of filing audited financial statements. This “snow ball” effect leads to yet even more charges by the OFR in its complaint and the OFR’s pursuit of a substantial penalty.
My law firm has successfully resolved these investment advisor cases with the Florida OFR on financial terms substantially below that which the OFR sought in its administrative complaint. I have also been successful in eliminating certain charges, including fraud. Each case is different, however, and no guarantees of a successful outcome can be made.
If you have been sued by the Florida OFR, or have been threatened with an administrative complaint, do not hesitate to call me for a free and confidential consultation.
David Chase, Esq., is a securities lawyer who represents financial advisors in securities regulatory investigations and enforcement litigation, including matters with the SEC, FINRA and the Florida Office of Financial Regulation. Mr. Chase is principal of the Law Firm of David R. Chase, P.A., a SEC defense law firm located in Fort Lauderdale, Florida, which handles cases in South Florida, including Miami and Boca Raton, as well as throughout the nation.
