A HOUSTON firm's role in recommending a mutual stock to investors has led to a conflict of interest fraud claim by the Securities and Exchange Commission.
Robare Group advised clients to purchase share stock without telling them the firm received undisclosed compensation payments for every client dollar spent.
The firm's owners, Mark L. Robare and Jack L. Jones Jr, bagged more than $440,000 in eight years for directing investors to a mutual fund rather than working in its clients best interest.
Marshall S. Sprung, co-chief of the SEC Enforcement Division’s Asset Management Unit said: "By failing to fully disclose its agreements with the brokerage firm, Robare Group deprived its clients of important information they were entitled to receive."
The Texas firm's filing of Form ADV back in 2011 had initially disclosed the compensation agreement, 'but this and later disclosures falsely stated that the firm did not receive any economic benefit from a non-client for providing investment advice', the SEC press release added.
Source: SEC Newsroom