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SEC fines Missouri RIA for breach of fiduciary duty

Jul 3, 2014 @ 11:27 am

By Joyce Hanson

SEC,enforcement action, RIA, breach of fiduciary duty
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The Securities and Exchange Commission on Wednesday fined the principals and comptroller of registered investment adviser SignalPoint Asset Management a total of $215,000 for breach of fiduciary duty by failing to disclose conflicts of interest to clients.

Without admitting or denying the findings, SignalPoint principals John W. Handy Jr., Jonathan C. Timson, and Dennis R. Walker and Comptroller Michael J. Orzel consented to the SEC order instituting administrative and cease-and-desist proceedings.

According to the SEC, the firm's principals provided brokerage and advisory services as both registered representatives and investment adviser representatives of an unnamed dually registered broker-dealer and investment adviser.

“During 2007 and early 2008, Handy, Timson and Walker sought permission from the dual registrant to form and own a separate investment advisory firm. After the dual registrant denied their ownership request, in August 2008, the principals formed and registered SAM by selecting three nominee owners to act as SAM's majority members,” the SEC said in a statement.

The principals provided all initial capital and from August 2008 through 2013 actively controlled SignalPoint Asset Management, but in advising some of their advisory clients to invest with the firm, they failed to disclose their control along with conflicts of interest associated with their capitalization and potential profits, the SEC said.

In addition, the SEC said, the RIA's Form ADVs failed to disclose the principals as control persons, and Mr. Orzel in his role as chief compliance officer was responsible for drafting and filing those forms.

SignalPoint Asset Management is a Missouri limited liability company headquartered in Springfield, Mo., that serves as an investment adviser to more than 1,800 separately managed accounts with combined assets under management of approximately $526 million, according to the SEC.

SignalPoint officials did not immediately respond to a request for comment Thursday afternoon.

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