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Westlaw News

IN BRIEF: SEC settles with five retail advisers over exchange-traded products

The U.S. Securities and Exchange Commission settled administrative proceedings against five investment advisers who agreed to pay a combined $3 million over their sales of exchange-traded products to retail customers without warning them of the short-term nature of the investments, the agency said in a statement on Friday.

Royal Alliance Associates Inc, Securities America Advisors Inc and Summit Financial Group Inc failed to have adequate policies in place to prevent ETPs that tracked market volatility from being sold to retail investors, the agency alleged in the settlements. American Portfolios Financial Services and Benjamin F. Edwards & Co Inc, also failed to supervise representatives who sold ETPs, the SEC said. The firms did not admit or deny wrongdoing but agreed to pay fines ranging from $500,000 to $650,000 and refrain from future violations.

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