The Securities and Exchange Commission filed charges Thursday against an investment advisory firm for allowing a broker the SEC booted out of the industry to work there.
The
SEC complaint alleges that Walter F. Grenda Jr. has associated with Grenda Group, a Buffalo, New York, advisory firm owned by his son, Gregory M. Grenda, since July 2015.
But in July 2015, Walter Grenda received a three-year bar by the SEC for violations involving a firm he owned, Reliance Financial Advisors. Prior to losing the SEC case against Reliance, Walter Grenda in 2014 sold the firm's advisory assets to Grenda Group, and his son became the investment adviser representative for the firm's clients.
Despite Walter Grenda's bar, the Grenda Group shared office space with Walter Grenda's new firm, Generational Wealth Management, which specializes in
estate planning and tax services.
The Grenda Group allowed Walter Grenda to work with Grenda Group clients without disclosing his bar, according to the SEC complaint. The firm also mislead clients who asked about Mr. Grenda's sanction.
In addition, the SEC charged that Walter Grenda impersonated Gregory Grenda on phone calls with Charles Schwab & Co., the Grenda Group's broker-dealer, regarding the firm's client accounts. When Schwab discovered the deception, it ended its relationship with the firm. But the Grenda Group told its clients that it dropped Schwab for cost and efficiency reasons.
The SEC is seeking monetary penalties and permanent injunctions against the Grenda Group, Walter Grenda and Gregory Grenda.
"Associational bars are designed to protect retail investors from those the SEC has deemed unfit to provide advisory services," Marc Berger, director of the SEC's New York office,
said in a statement. "Here, we allege that bar was circumvented and took action to ensure investors are protected."
Lawyers for both of the Grendas and the Grenda Group were not immediately available for comment.
