SEC Charges 12 Additional Financial Firms for Failure to Meet Form CRS Obligations

Form CRS Failures can have serious implications.

For example, in January 2022 the SEC filed, and settled charges with six investment advisers and six broker-dealers for failing to file and deliver client or customer relationship summaries – known as Form CRS – to their retail investors by the required deadline and, in some cases, failed to include all information necessary to satisfy Form CRS requirements.

So far, the SEC has filed charges against 42 firms for failing to meet teh requirements of Form CRS.

Background of Form CRS

On June 5, 2019, the SEC adopted Form CRS and required SEC-registered investment advisers and SEC-registered broker-dealers to file their respective Forms CRS with the SEC, begin delivering them to prospective and new retail investors by June 30, 2020, and deliver them to existing retail investor clients or customers by July 30, 2020. The SEC also required firms to prominently post their current Form CRS on their website, if they had one. According to the SEC’s orders, each of the firms charged missed those regulatory deadlines. In addition, the orders find that certain firms failed to include information and language specifically required for Form CRS.

The SEC’s orders find that the investment advisers violated Section 204 of the Investment Advisers Act of 1940 and Advisers Act Rules 204-1 and 204-5, and that the broker-dealers violated Section 17(a)(1) of the Securities Exchange Act of 1934 and Exchange Act Rule 17a-14.  Without admitting or denying the findings, each of the firms agreed to be censured, to cease and desist from violating the charged provisions, and to pay the following civil penalties:

On July 26, 2021, the SEC announced settlements with 27 other financial firms for similar failures to timely file and deliver their Forms CRS to their retail investors. Three other investment advisers subsequently settled with the SEC in separate administrative proceedings:  Disciplined Capital Management LLCLexicon Capital Management LP; and Newman Ladd Capital Advisors, LLC.

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Securities Attorney at Sallah Astarita & Cox | 212-509-6544 | | Website | + posts

Mark Astarita is a nationally recognized securities attorney, who represents investors, financial professionals and firms in securities litigation, arbitration and regulatory matters, including SEC and FINRA investigations and enforcement proceedings.

He is a partner in the national securities law firm Sallah Astarita & Cox, LLC, and the founder of The Securities Law Home Page -, which was one of the first legal topic sites on the Internet. It went online in 1995 and is updated daily with news, commentary and securities law related links.

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