Sanders Morris Harris Group Inc., a wealth management broker-dealer that owns Edelman Financial Services LLC, indicated in its quarterly report that regulators have decided to recommend disciplining the company.
Sanders Morris Harris Group Inc., a wealth management broker-dealer that owns Edelman Financial Services LLC, indicated in its quarterly report that regulators have decided to recommend disciplining the company.
In a Wells notice sent last month, officials at the Financial Industry Regulatory Authority Inc. informed Sanders Morris Harris of their intent to bring an action against the broker-dealer.
“The staff of Finra has made a preliminary determination to recommend that disciplinary action be brought against [Sanders Morris Harris] and two former employees, based on alleged violations of certain federal securities laws and Finra rules,” the letter stated. The violations and deficiencies were spotted during a 2008 exam, according to the letter.
Under the Wells procedure, the firm has an opportunity to respond to Finra before any action is taken. According to the filing, discussions have commenced between Finra and Sanders Morris Harris' legal counsel.
John Unger, the firm's general counsel, said that it “corrected these issues, and none showed up on the 2010 exam” by Finra.
The filing made no mention of Edelman Financial Services in connection to the Wells notice.
Ric Edelman, chief executive of Edelman Financial Services and president of Sanders Morris Harris, said: “This all occurred prior to my getting involved with the management” of the firm. The issues cited by Finra “are in our distant past,” he said.
E-mail Bruce Kelly at bkelly@investmentnews.com.
