MutualFundWire.com: An RIA Defeats an SEC Attack Over Rev-Sharing Disclosures

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Friday, June 5, 2015

An RIA Defeats an SEC Attack Over Rev-Sharing Disclosures

A Texas-based RIA just defeated an SEC (Securities and Exchange Commission) attack over revenue sharing disclosures. Yet the case might not be over yet.

Mark L. Robare
Robare & Jones Asset Managers
Principal, Founder

Yesterday Administrative Law Judge James Grimes dismissed the regulatory agency's case (technically an administrative proceeding) against the Houston-based Robare Group (dba Robare & Jones Asset Managers), Mark L. Robare, and Jack J. Jones Jr.. The SEC staffers could appeal the decision to the Commission itself, and any decision there could be appealed up through a U.S. Court of Appeals.

"We are reviewing the decision," an SEC spokesperson tells MFWire.

Jack L. Jones Jr.
Robare & Jones Asset Managers
Partner, Owner

MFWire could not immediately reach Robare himself (principal and founder of the firm) or Robare's attorney, Alan Wolper of Chicago-based Ulmer & Berne, for comment on the judge's decision.

"In listening to Mr. Robare and Mr. Jones testify and observing their demeanor under cross-examination, it is difficult to imagine them trying to defraud anyone, let alone their investment clients," the judge writes, adding that the duo "credibly testified that they did not know which funds paid fees under the Program" and "relied in good faith on the advice of its compliance firms."

In September the SEC accused the Robare Group of failing to adequately disclose (via its form ADV) revenue sharing payments, in the form of "servicing fee" and "custodial support services" agreements, that came to Robare through an unnamed broker-dealer thanks to using certain funds on an NTF (no transaction fee) mutual fund platform, also unnamed. The judge's order from yesterday reveals the NFT platform to be from Fidelity's National Financial Services and reveals Triad Advisors as the B-D in question.

MFWire could not immediately reach spokespeople for Fidelity and Triad for comment on the judge's decision. Neither Fidelity nor Triad were accused of any wrongdoing in the proceeding.

Robare & Jones works with more than $350 million in client assets. Robare is the principal and founder of the firm, and Jones, his son-in-law, is a partner and owner.

Printed from: MFWire.com/story.asp?s=51947

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