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SEC Fines New York RIA $50,000 for Custody Rule Violations

Posted on September 8th, 2025 at 1:32 PM
SEC Fines New York RIA $50,000 for Custody Rule Violations

From the desk of Jim Eccleston at ÍøÆØ³Ô¹Ï

The Securities and Exchange Commission (SEC) has fined Munakata Associates, a New York-based registered investment adviser, $50,000 for failing to comply with the agency’s custody rule requirements.

According to the SEC’s order, from at least 2018 through 2024, the firm’s president acted in multiple roles that gave the firm custody of client funds and securities. This included serving as a co-trustee for two trusts that were advisory clients, holding signatory authority over four client accounts, and serving as an authorized agent with power of attorney for five additional client accounts.

ThinkAdvisor reports that, under the custody rule, the firm was required to arrange for independent verification of those assets through surprise examinations conducted by an accounting firm registered with the Public Company Accounting Oversight Board. The SEC found that Munakata Associates failed to arrange for any such exams during the relevant period.

This enforcement action did not involve allegations of investor harm or client losses, highlighting the SEC’s focus on strict adherence to technical compliance obligations.

 

ÍøÆØ³Ô¹Ï LLC represents investors and financial advisors nationwide in securities, employment, transition, regulatory, and disciplinary matters.

Tags: eccleston, eccleston law, sec

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