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Rating:Lawyers Sniff Around the RIA Pay-to-Play Story Not Rated 0.0 Email Routing List Email & Route  Print Print
Wednesday, April 10, 2013

Lawyers Sniff Around the RIA Pay-to-Play Story

Reported by Tommy Fernandez

Never underestimate the headache-making power of a good news story.

Reuters reported Monday that at least three RIAs are being paid by Fidelity [profile] and Schwab [profile] to peddle their mutual funds to clients.

Now a law firm is getting into the act.

Zamansky & Associates is investigating fees allegedly paid to the wealth management firms Sontag Advisory, PHH Investments Ltd., Dion Money Management and Luminous Capital, a division of First Republic Bank. The investigation conducted on behalf of customers with accounts at these wealth management firms concerns whether these firms received payments by fund companies for putting clients in no-transaction funds, and whether receipt of these fees violated fiduciary duties and/or was not sufficiently disclosed to investors.

The firm announced that it is investigating these payments and the recommendation of funds by these firms to investors.

Meanwhile, Zamansky & Associates also reported that it is co-lead counsel for a putative class of investors who allege that JPMorgan invested them into conflicted proprietary funds in breach of fiduciary duties. The case is Holtz v. JP Morgan Securities LLC, northern District of Illinois, Eastern Division, Case No. 12-CV-7080.

Here is the press release:
Company Press Release

Zamansky Investigates Allegations of Payments By Fund Companies To Wealth Management Firms Sontag Advisory, PHH Investments, Dion Money Management and Luminous Capital



Zamansky & Associates LLC is investigating allegations of payments by mutual fund companies to wealth management firms Sontag Advisory LLC, PHH Investments Ltd., Dion Money Management LLC and Luminous Capital, a division of First Republic Bank. The investigation on behalf of the account-holders concerns whether fees were received by these wealth management firms for putting their customers into no-transaction funds and whether receipt of these fees violated fiduciary duties and/or was not sufficiently disclosed to investors.

New York, New York April 09, 2013

Zamansky & Associates LLC is investigating fees allegedly paid by mutual fund companies to wealth management firms Sontag Advisory LLC, PHH Investments Ltd., Dion Money Management LLC and Luminous Capital, a division of First Republic Bank. The investigation conducted on behalf of customers with accounts at these wealth management firms concerns whether these firms received payments by fund companies for putting clients in no-transaction funds, and whether receipt of these fees violated fiduciary duties and/or was not sufficiently disclosed to investors.

On April 5, 2013 Jed Horowitz of Reuters reported in “Some Wealth Advisers Take a Fee For Clients’ Fund Assets” that these large wealth management firms, Sontag Advisory LLC, PHH Investments Ltd., Dion Money Management LLC and Luminous Capital, received payments from Fidelity or Schwab for putting clients in no-transaction funds. In this article, Horowitz reported that First Republic acknowledged that these payments create a conflict of interest between the investor and firm.

Zamansky & Associates LLC is investigating these payments and the recommendation of funds by these firms to investors. In a related situation, Zamansky & Associates LLC is co-lead counsel for a putative class of investors who allege that JPMorgan invested them into conflicted proprietary funds in breach of fiduciary duties. The case is Holtz v. JP Morgan Securities LLC, northern District of Illinois, Eastern Division, Case No. 12-CV-7080.

According to Jake Zamansky, "Wealth managers have fiduciary duties to recommend funds that are the most suitable and appropriate for their clients, not the ones that pay them the most in fees. Fees paid by investors for services should also not be duplicative or for services never rendered." He continues, "Investors who pay for high quality management deserve and expect to receive high skilled and ethical advice in return – they do not expect to have to themselves research the conflicts and fees of their advisor."

What Fund Investors Can Do

If you would like to us to review your investments in the Funds or discuss your legal rights, you may, without obligation or cost to you, email jake(at)zamansky(dot)com or call the law firm at (212) 742-1414.

About Zamansky & Associates LLC

Zamansky & Associates LLC is one of the leading law firms specializing in securities fraud and financial services arbitration and class action litigation. We represent both individual and institutional investors. Our practice is nationally recognized for our ability to aggressively prosecute cases and recover losses.

To learn more about Zamansky, please visit our website, http://www.zamansky.com.
 

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