SEC Charges Five Broker-Dealers for Failure to Meet Form CRS Obligations

ADMINISTRATIVE PROCEEDING
File Nos. 3-22198; 3-22199; 3-22200; 3-22201; 3-22202

September 25, 2024 - The Securities and Exchange Commission today announced that five broker-dealers have agreed to settle charges that they failed to file and deliver customer relationship summaries - known as Form CRS - that included all information necessary to satisfy Form CRS requirements. Four of the five firms failed to make a mandatory disclosure concerning the firm or its financial professionals' legal or disciplinary histories.

According to the SEC's orders, each of the five broker-dealers charged today failed to include required information and language in their Forms CRS. Two of the firms failed to disclose their and their financial professionals' legal or disciplinary histories in response to Item 4 of their Forms CRS. Two firms failed to timely update their Forms CRS after employing financial professionals with legal or disciplinary histories. The fifth firm filed a Form CRS that failed to include required information and prescribed language and failed to timely file and deliver the Form CRS according to the regulatory deadlines.

The SEC's orders find that the broker-dealers willfully violated Section 17(a)(1) of the Securities Exchange Act of 1934 and Exchange Act Rule 17a-14 thereunder. Without admitting or denying the findings, each of the broker-dealers agreed to be censured, to cease and desist from violating the charged provisions, and to pay the following civil penalties:

• Elevation, LLC, a Charlotte, North Carolina-based broker-dealer, has agreed to pay a $60,000 civil penalty.
• Investment Security Corporation, a Calabasas, California-based broker-dealer, has agreed to pay a $25,000 civil penalty.
• LODAS Securities, LLC, an Overland Park, Kansas-based broker-dealer, has agreed to pay a $12,000 civil penalty.
• Ministry Partners Securities, LLC, a Brea, California-based broker-dealer, has agreed to pay a $30,000 civil penalty.
• Vistia Capital, LLC, a Castle Rock, Colorado-based broker-dealer, has agreed to pay a $60,000 civil penalty.

The SEC's investigation was conducted by Christian Ascunce and Kaitlin Ostling under the supervision of Elisabeth Grimm and Stacy Bogert. The compliance examinations that led to the investigations were conducted by staff of the SEC's Division of Examinations.