Trustee Bank Will Pay $1 Million Fine for Aiding/Abetting Securities Fraud
A U.S. bank that served as directed trustee for an allegedly fraudulent investment plan operated by an unregistered broker-dealer outside the U.S. agreed to pay a $1 Million fine for aiding and abetting securities laws violations. The SEC has alleged that the unregistered BD committed securities fraud by failing to disclose exorbitant commissions to mostly Latin American clients for investment accounts housed at the bank and invested in U.S. mutual funds. The SEC alleges that the bank aided and abetted by allowing its name and reputation to be used in marketing and failing to disclose the commissions received by the primary defendant.
OUR TAKE: The SEC is putting an added regulatory burden on service providers to monitor the securities law compliance of investment product distributors.