Tr?id=566623520170033&ev=PageView&noscript=1

ÍøÆØ³Ô¹Ï

SEC Scrutiny Intensifies Over Cash Management in Advisory Accounts

Posted on August 20th, 2024 at 11:13 AM
SEC Scrutiny Intensifies Over Cash Management in Advisory Accounts

From the desk of Jim Eccleston at ÍøÆØ³Ô¹Ï

InvestmentNews reports that recent developments have intensified concerns about how broker-dealers manage cash in investment advisory accounts. Morgan Stanley and ÍøÆØ³Ô¹Ïlls Fargo & Co. are currently under scrutiny from the Securities and Exchange Commission (SEC) regarding their handling of client cash balances.

Morgan Stanley recently disclosed that the SEC is seeking information about specific advisory accounts. This follows ÍøÆØ³Ô¹Ïlls Fargo's announcement last week that it is negotiating with the SEC over an investigation into its cash sweep practices in advisory accounts.

Both firms are not alone; many broker-dealers face similar inquiries. According to InvestmentNews, with interest rates rising sharply from near zero in early 2022 to over 5 percent, the SEC is focusing on whether firms are optimizing returns on client cash.

ÍøÆØ³Ô¹Ïlls Fargo had previously revealed an ongoing SEC investigation into its cash sweep options provided to advisory clients. The SEC is examining whether these options were appropriately disclosed at account opening.

Morgan Stanley reported that since April 2024, it has been responding to the SEC's request for information related to advisory account cash balances and compliance with the InvestmentAdvisers Act of 1940.

 

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

Tags: eccleston, eccleston law, sec

Return to Archive

TESTIMONIALS

Previous
Next
Quotes Bigger

I have the best legal firm in the country to defend me. Awesome job!

Cindy C.

LATEST NEWS AND ARTICLES

1783615970 Law
July 9, 2026
FINRA Suspends Former Branch Manager for Supervisory Failures Linked to Excessive Trading and Churning

A former regional branch manager at a broker-dealer has agreed to Financial Industry Regulatory Authority (FINRA) sanctions after the regulator found that he failed to supervise registered representatives who engaged in excessive trading and churning of customer accounts.

1783525964 Law
July 8, 2026
SEC Sanctions David Lerner Associates for Regulation Best Interest Violations

David Lerner Associates has agreed to settle Securities and Exchange (SEC) charges alleging violations of Regulation Best Interest (Reg BI) that resulted in unnecessary costs to retail investors, according to InvestmentNews.

1783434190 Law
July 7, 2026
Private Credit Funds Face Mounting Redemption Pressure as Investor Sentiment Shifts

A surge in investor redemption requests has intensified pressure on private credit funds, raising concerns about liquidity and long-term stability across the asset class, as reported by The Wall Street Journal.