Defendant Name: Lockwood Advisors, Incorporated

Defendant Type: Subsidiary of Public Company
Public Company Parent: Bank of New York Mellon Corporation
SIC Code: 6022
CUSIP: 06405810

Initial Case Details

Legal Case Name In the Matter of Lockwood Advisors, Incorporated
First Document Date 14-Aug-2018
Initial Filing Format Administrative Action
File Number 3-18638
Allegation Type Investment Advisers/Investment Companies

Violations Alleged

Section 206(4) Investment Advisers Act; Rule 206(4)-7 Investment Advisers Act


First Resolution Date 14-Aug-2018
Headline Total Penalty and Disgorgement

See Related Documents

Related Documents:

IA-4984 14-Aug-2018 Administrative Proceeding
Order Instituting Cease-and-Desist Proceedings Pursuant to Section 203(k) of the Investment Advisers Act of 1940, Making Findings, and Imposing a Cease- and-Desist Order
According to the SEC, "This matter arises from Lockwood's failure to adopt and implement policies and procedures reasonably designed to prevent violations of the Advisers Act and the rules thereunder in connection with its assessment, oversight, and disclosure of the trading away practices of the third-party portfolio management firms in its wrap programs. More specifically, as described below, from at least 2008, and continuing on an ongoing basis to the present, Lockwood's policies and procedures failed to require that material information about trading away (i) would be obtained and considered by Lockwood prior to making the third-party portfolio management firms available to clients in its wrap programs and/or (ii) would be disclosed to clients directly or through their third-party registered investment advisers."
IA-4984-s 14-Aug-2018 Administrative Summary
SEC Charges Investment Adviser for Compliance Failures Relating to Wrap Fee Programs
The Commission stated that: "As a sponsor of wrap fee programs, Lockwood offers investors a selection of various subadvisers to choose from, which in turn select investments on their behalf. Those subadvisers typically directly trade through the wrap fee program's participating broker-dealer because the cost of execution is included in the annual wrap fee that each client pays to participate in the program. However, if a subadviser trades away by choosing a different broker- dealer to execute a particular trade, the client often incurs additional transaction costs. The SEC's order found that Lockwood failed to adopt and implement policies and procedures requiring it to gather information about subadvisers' trading away and requiring it to disclose that information to wrap fee program clients so that they could make informed investment decisions."