The SEC is seeking judgement, disgorgement and civil penalties against Western and the five brokers in the case.
“As expected, it was only a matter of time until the SEC filed its first claim alleging violations of Regulation Best Interest,” Max Schatzow, co-founder and partners at RIA Lawyers LLC told Financial Advisor.
It will be really difficult for firms to mount defenses against SEC Reg BI cases because “as we are now seeing these cases are so factually intensive,” Schatzow said.
“For broker-dealers and their compliance departments, it is really important to review this case and ... and take a second look at their policies and procedures ... to understand what [SEC] staff is expecting,” Schatzow added.