During the examination of a Investment Advisor the review of the firms trade blotter and fee invoice found the firm was withdrawing surrender-free money from accounts for which a client was paying percentage of assets under management and pruchasing annuity add-ons for which a commission was earned for the same period, a violation of NMAC 12.11.7K(2). When the overbilling was detected, the client was contacted and the fee was credited to the client.
While reviewing the records of an Investment Advisor firm with multiple representatives, it was discovered that representatives were not disclosing their outside business activities. They also did not disclose personal bankruptcies as required. The firm was operating without the designated principal having the required S24 examination, nor did the principal have a professional designation waiver. All disclosures were updated and the designated principal obtained the required S24 examination, no further action was required.
An examination of an Albuquerque registered Investment Advisor showed the firm had two representatives registered without the designated principal holding the proper S24 examination, or professional designation waiver. The firm was given a deadline for the designated principal to take the S24 examination. The firm failed to do so even after being given another extension of time. The firm voluntarily terminated the other representative. While the individual is still employed with the firm the individual cannot give any investment advice to clients and now has an operational role.
During the examination of a SEC Investment Advisor firm who switched to state registration, the firm had an investment adviser representative who executed over 100 trades without being registered in New Mexico, in violation of the New Mexico Uniform Securities Act. The firm was fined $5,500 in civil and investigative costs and had to pay the $100 cost of the examination.
During the review of the firm’s application, the firm transacted business in New Mexico without being licensed, in violation of the New Mexico Uniform Securities Act. The firm was fined $3,500 and had to pay registration fees in the amount of $350.
An Investment Advisor firm was recently examined after switching from SEC to state jurisdiction. The examination found the firm borrowed money and issued promissory notes to existing clients in violation of the New Mexico Uniform Securities Act. The firm was fined $7,500 and had to pay the $100 cost of the examination.