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SEC Charges Investment Advisor with Hiding Kickbacks from Clients

The Securities and Exchange Commission (SEC) charged Total Wealth Management, a San Diego financial advisory firm, with failing to disclose its revenue sharing “kickback” arrangement with Altus Management, a San Francisco asset management firm that it owned.

Along will conflict of interest allegations, the SEC complaint also accused Total Wealth of misleading Altus Investors regarding the due diligence it performed on Altus Fund holdings.

“Investment advisers owe a fiduciary duty of utmost good faith and full and fair disclosure to their clients,” said Michele Wein Layne, director of the SEC’s Los Angeles regional office.

“Total Wealth violated that duty with its pervasive practice of placing clients in funds holding risky investments while concealing the revenue sharing fees they paid themselves.”

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