Robare Group Was Charged for Failing to Inform Clients of Clandestine Relationship with Unspecified Broker-Dealer
Houston-based investment adviser Robare Group did not divulge to its clients that it was getting commissions from a broker for staking funds recommended by said broker, the Securities and Exchange Commission claims.
Robare Group received $441,000 in Broker Fees, according to the SEC
Following an arrangement made in 2004, Robare took in hundreds of thousands of dollars, according to an SEC investigation. From September 2005 until September 2013, the undisclosed broker would pay from two to twelve basis points as the adviser invested funds in no-transaction-fee mutual funds.
Handshake Agreement Sparked Lure to Invest in Suspect Funds
The co-owners of Robare, Mark L. Robare and Jack L. Jones Jr., might have chosen better-performing funds had their capital not been engorged by the recommendations of the unnamed broker, the SEC deposes. Robare Group, with approximately $150 million in assets under management, might have had a bias in favor of NTF mutual funds over other investments that would not generate revenue for the Robare Group, thus posing a conflict of interest, according to the SEC complaint. In addition, from 2005 until December 2011, Robare did not reveal their revenue agreement whilst filling out its form ADV.
Robare Finally Disclosed, But Not Fully
Robare made their secret deal public in December 2011, but did not adequately reveal that the deal presented a conflict of interest, and that Robare “may receive compensation” from the broker, according to the SEC.
Robare Lawyer Intends to Refute Allegations “Vigorously”
Alan Wolper, an attorney at Ulmer & Berne representing Robare Group, believes that the Securities and Exchange Commission does not have enough proof to back up its claim that Robare was not distributing impartial investment advice. Robare Group is a registered investment adviser in Houston that dispenses services for 350 separately managed accounts.
Similar to a Case in Oregon
In a similar 2012 case, the Securities and Exchange Commission decreed a settled administrative proceeding against two Portland, Oregon-based investment advisory firms and their owner regarding their lack of disclosure to clients over potential conflicts of interest, including a revenue-sharing agreement.
Investment Fraud Lawyers Investigating Robare Group
The Peiffer Rosca securities attorneys often represent investors who lose money as a result of Ponzi schemes, investment fraud, or stockbroker misconduct. They are currently investigating the possibility of assisting victims with the recovery of their losses. They take most cases of this type on a contingency fee basis and advance the case costs, and only get paid for their fees and costs out of money they recover for their clients.
Investors who believe they lost money as a result of investment fraud or misconduct may contact the securities lawyers at Peiffer Rosca, Jason Kane or Joe Peiffer, for a free, no-obligation evaluation of their recovery options, at (585) 310-5140.