SEC Charges Investment Advisory Firm and Top Officials with Custody Rule Violations
The SEC announced charges against an investment advisory firm and three top officials for violating the "custody rule" that requires firms to follow certain procedures when they control or have access to client money or securities.
In the order in which the charges were made, the SEC alleged that Sands Brothers Asset Management LLC has been at least 40 days late repeatedly in providing investors with audited financial statements for its private funds. Additionally, the SEC alleged that the firm's cofounders and chief compliance officer were responsible for the firm's failure to comply with the custody rule.