SEC Sanctions Two Investment Advisers for Best Execution Failures (with Lofchie Comment)

The SEC sanctioned two investment advisory firms for failing to seek best execution on client trades placed with their affiliated or related brokerage operations. A.R. Schmeidler Co. ("ARS") and Goelzer Investment Management ("GIM") were cited, respectively, for failing to reevaluate whether it was providing best execution for clients, and for misrepresentations in its Form ADV about the process of selecting a broker for advisory clients. ARS has agreed to pay $1 million to settle the damages, while GIM has agreed to pay nearly $500,000.

Lofchie Comment: The press release seems intended to send a warning to investment advisers that are executing trades through an affiliate that they should better evaluate whether they are obtaining best execution, including charging fair commissions.

See: SEC Press Release.