Advisor Resource Council (ARC) agreed to pay a $300,000 penalty to resolve charges levied by the Securities and Exchange Commission (SEC) of compliance failures exacerbated by staffing woes.
The Texas-based registered investment adviser was charged in September with making false and misleading statements in its Form ADV brochures and failing to adopt policies and procedures to ensure fair and equitable trade allocations among its advisory clients. The SEC announced final judgment against the firm in a litigation release published Friday.
ARC consented to the retention of an independent compliance consultant as part of its resolution.
The SEC’s original complaint also charged Steven Jacobson, a former representative associated with ARC, regarding his alleged role in a cherry-picking scheme that occurred in 2020. ARC did not adequately monitor Jacobson’s trading activity, according to the SEC, and its Form ADV disclosures to clients were made false and misleading because of his alleged actions.
The SEC’s litigation against Jacobson is ongoing.
In its complaint, the agency further criticized ARC for having 74 independent adviser representatives spread across approximately 40 branch offices in multiple states supervised by just three compliance staff located in Dallas.
ARC did not respond to a request for comment.
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