Publicly available records provided by the Securities and Exchange Commission (SEC) indicate that administrative proceedings were recently brought against investment advisory firm, NPB Financial Group, LLC (CRD # 137743/SEC # 801-65903,8-67113) pursuant to Section 15(b) of the Securities Exchange Act of 1934 and Sections 203(e) and 203(k) of the Investment Advisers Act of 1940 (“Advisers Act”). Specifically, on August 20, 2020, the SEC issued an Order making findings, and imposing remedial sanctions and a cease-and-desist Order against the company.
The Law Office of Kevin J. Deloatch, Esq. is interested in speaking to investors who have complaints regarding NPB Financial Group, LLC.
Registration Background for NPB Financial Group, LLC
NPB Financial Group, LLC (NPB Financial Group) is dually a registered broker-dealer and Investment Adviser headquartered in Burbank, CA. It has been registered with the SEC and the Financial Industry Regulatory Authority (FINRA) since 2006.
SEC’s Findings against NPB Financial Group, LLC
The SEC’s August 20, 2020 Order makes clear that in anticipation of the institution of the SEC’s administrative proceedings, NPB Financial Group submitted an Offer of Settlement (the “Offer”) in which it consented to, without either admitting to or denying, the following findings of the SEC:
- NPB Financial Group breached its fiduciary duty, in connection with its mutual fund share class selection practices and its receipt of fees pursuant to Rule 12b-1 under the Investment Company Act of 1940;
- “At times during the period from January 2014 through March 2019 (the “Relevant Period”), NPB purchased, recommended, or held for advisory clients mutual fund share classes that charged 12b-1 fees, including when lower-cost share classes of the same funds were available to the clients”;
- “During the Relevant Period, NPB did not provide any disclosures to clients regarding its and its associated persons’ ongoing receipt of 12b-1 fees from mutual funds recommended to NPB clients”;
- “As an investment adviser, NPB was obligated to disclose all material facts to its advisory clients, including any conflicts of interest between itself and/or its associated persons and its clients, that could affect the advisory relationship and how those conflicts could affect the advice NPB provided its clients”;
- “An investment adviser’s fiduciary duty includes, among other things, an obligation to seek best execution for client transactions”;
- “By causing certain advisory clients to invest in fund share classes that charged 12b-1 fees when share classes of the same funds were available to the clients that presented a more favorable value under the particular circumstances in place at the time of the transactions, NPB violated its duty to seek best execution for those transactions”;
- “Furthermore, NPB failed to adopt and implement written compliance policies and procedures reasonably designed to prevent violations of the Advisers Act and the rules thereunder in connection with its mutual fund share class selection practices”;
- “NPB learned about the [Share Class Selection Disclosure Initiative] and its specifics in approximately February 2018, and understood that investment advisers should disclose to clients the receipt of 12b-1 fees by the firm and its associated persons, and the associated conflicts of interest. NPB, however, did not self-report under the SCSD Initiative and failed to address its undisclosed conflicts of interest”; and
- As a result of the conduct described above, NPB Financial Group willfully violated Section 206(2) of the Advisers Act, which makes it unlawful for any investment adviser, directly or indirectly, to “engage in any transaction, practice or course of business which operates as a fraud or deceit upon any client or prospective client”; and “Section 206(4) of the Advisers Act and Rule 206(4)-7 thereunder, which require a registered investment adviser to adopt and implement written compliance policies and procedures reasonably designed to prevent violations of the Advisers Act and the rules thereunder.”
The SEC Sanctions NPB Financial Group, LLC
As a result of the above described offer and findings, the SEC’s August 20, 2020 Order also indicates that NPB Financial Group consented to the following sanctions:
- To cease and desist from committing or causing any violations and any future violations of Section 206(2) and 206(4) of the Advisers Act and Rule 206(4)-7 promulgated thereunder.
- A censure; and
- Pay disgorgement, prejudgment interest and a civil penalty totaling $1,050,188.11.
If you or someone you know has or had an investment advisory relationship with MPB Financial Group, LLC and have concerns regarding losses in your investments or possible sales practice violations including fraud, you may be entitled to recover lost funds. The Law Office of Kevin J. Deloatch, Esq. has an extensive securities law practice and over 30 years of experience on Wall Street. Call today at (646) 792-2156 for a free consultation. The time to file your claim may be limited so you should call today to avoid delay.