In the Matter of Cadaret, Grant & Co., Inc.
Admin. Proc. File No. 3-18087

On June 28, 2017, the Commission instituted and simultaneously settled administrative and cease-and-desist proceedings (the “Order”) against Cadaret, Grant & Co., Inc. (“Respondent”). In the Order, the Commission found that, from at least 2011 to 2016, the Respondent, a dual registered broker-dealer and investment adviser, violated federal securities laws by failing to disclose, on its Forms ADV or otherwise, its conflict of interest concerning its selection of mutual fund share classes and its practice to retain prepaid advisory fees paid by clients who terminated their relationship with the Respondent before having earned all of the prepaid fees.

The Commission ordered the Respondent to pay a total of $3,048,000 in disgorgement, prejudgment interest, and civil money penalties. The Commission also created a Fair Fund, pursuant to Section 308(a) of the Sarbanes-Oxley Act of 2002, as amended, so the penalties, along with the disgorgement and interest, collected can be distributed to those harmed by the Respondent’s misconduct described in the Order (“Fair Fund”).

The Order provides for the Respondent to deposit the Fair Fund into an escrow account, acceptable to the Commission staff. The Respondent is responsible for distributing the Fair Fund in accordance with the Order. Tax compliance and any related administrative expenses are the responsibility of the Respondent. The Order requires that the Respondent submits to the Commission staff a final accounting and certification of the disposition of the Fair Fund within 120 days of the Distribution. See the Commission’s order: Release No. 34-81274.

This matter was closed on May 14, 2019, when the Commission issued an order transferring all remaining funds and any funds returned to the Fair Fund in the future to the U.S. Treasury and terminating the Fair Fund. See the Commission’s Order: Release No. 85858.