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They allegedly ignored or did not fully understand the information on the firm’s prospectus for complex exchange-traded products including the warning against holding it as a long-term investment.

Under the SEC order, Benjamin Edwards & Company is required to pay disgorgement, prejudgment interest, and a civil monetary penalty totaling $685,134.36.

SEC allegations and order against Summit Financial Group

Summit Financial Group failed to fully implement its own policy banning volatility-linked exchange-traded products from client accounts. The firm also failed to take sufficient actions to determine whether clients continued to maintain such investment products, the SEC alleged.

The Commission ordered the firm to pay disgorgement, prejudgment interest, and a civil monetary penalty totaling $603,799.08.

SEC allegations and order against Securities America Advisors

The SEC alleged that Securities America Advisors’ policies and procedures concerning the suitability of volatility-linked exchange-traded products were inadequate to prevent violations of the Advisers Act. It also failed to implement its existing policies and procedures, which prohibits long-term investments in such products.

The Commission ordered the firm to pay disgorgement, prejudgment interest, and a civil monetary penalty totaling $603,776.82.

SEC allegations and order against Royal Alliance Associates

The SEC alleged that Royal Alliance Associates failed to implement its written supervisory policy and sales practice manual requiring its representatives to ensure that their actions are “consistent with the fiduciary duty owed to their clients.”

The firm’s representatives failed to make suitable recommendations to clients about volatility-linked exchange-traded products. They also failed to conduct reasonable investigations and due diligence into such products recommended to clients, according to the Commission.

Under the SEC order, Royal Alliance Associates is required to pay disgorgement, prejudgment interest, and a civil money penalty totaling $502,400.29.

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