The SEC has won a final judgment against a deVere USA advisor and a manager for not telling clients about their compensation for making overseas pension transfers, the SEC announced today.
The U.S. District Court for the Southern District of New York entered final consent judgments against Benjamin Alderson, the former CEO of registered investment advisor deVere USA, and Bradley Hamilton, a former deVere USA manager, for omitting information and making misstatements to clients and prospective clients to whom they recommended overseas pension transfers, the SEC said.
In earlier action in June, deVere USA agreed to pay an $8 million penalty in connection with the same case. Neither deVere USA, Alderson or Hamilton admitted or denied the charges in agreeing to the settlements.
The final judgment against Alderson orders him to pay disgorgement of $265,000, prejudgment interest of $10,060 and a civil penalty of $125,000. The final judgment against Hamilton orders him to pay disgorgement of $265,000, prejudgment interest of $10,060 and a civil penalty of $75,000. Alderson also has been permanently barred from the financial industry.
“Although Alderson and Hamilton were investment advisers with a fiduciary duty to provide full and fair disclosure of all material facts, they nonetheless provided advice that was self-interested and designed to push clients and prospective clients toward a [pension] transfer, which, when effected, generated for defendants millions of dollars in undisclosed commissions,” the SEC complaint said.
Alderson and Hamilton are citizens of the United Kingdom. Hamilton was residing in New York City and Alderson was residing in the Bahamas. The actions took place for nearly four years ending in 2017, the SEC said.
In June, DeVere USA was charged by the SEC with failing to disclose agreements with overseas product and service providers that resulted in compensation being paid to deVere USA advisors and an overseas affiliate. The SEC order found that the undisclosed compensation, including an amount equivalent to 7% of the pension transfer value, created an incentive for deVere USA to recommend a pension transfer and particular product or service providers that were obligated to make payments.
In the SEC complaint against Alderson and Hamilton, the SEC alleged that the defendants misled clients and prospective clients about the benefits of pension transfers while concealing material conflicts of interest, including the substantial compensation that they personally stood to receive.
“Investment advisors have an obligation to disclose direct and indirect financial incentives,” said Marc P. Berger, director of the SEC’s New York regional office. “DeVere USA brushed aside this duty while advising retail investors about their retirement assets.”