Creative Planning, custodians prevail as referral, retaliation suit dismissed; SEC officials raise compliance doubts; takeaways from Future Proof
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INDUSTRY NEWS: A lawsuit filed against Creative Planning , its founder Peter Mallouk and the industry's largest custodians failed to pass muster in federal court — at least for now. U.S. District Judge LaShonda Hunt dismissed the case citing a lack of evidence and specificity in the allegations made by Stephen A. Greco in Chicago federal court and the absence of responses by the plaintiffs to subsequent filings by defendants Creative Planning, Mallouk, Charles Schwab , TD Ameritrade , 富达 and private equity firm General Atlantic .?
The claims in Greco's 15-count complaint included conspiracy, breach of contract and unjust enrichment, among others. He accused the firms of "wide-ranging unfair and anticompetitive practices and schemes" and an attempt to "to silence Greco and retaliate" by interfering with the business of the RIA firm he launched after leaving Creative Planning in 2017, Oakbrook Terrace, Illinois-based Spotlight Asset Group, Hunt noted in the ruling. The complaint placed the referrals that Schwab and Fidelity supply at a high cost exclusively to some of the largest RIAs at the center of its case against Creative and the custodians.
REGULATION AND COMPLIANCE: Amid the latest round of fines for "off channel" communications, two SEC commissioners are questioning if firms really have any chance of regulatory compliance.
The U.S. Securities and Exchange Commission on Tuesday hit 12 firms with $88 million in total penalties for not doing enough to monitor and record communications their employees send on WhatsApp and similar electronic messaging services. The individual fine amounts were as high as $35 million — charged to Stifel Nicolaus and Invesco Distributors, along with Invesco Advisers. On the low end, a penalty-fee censure was imposed on Qatalyst Partners , a San Francisco-based broker-dealer credited with cooperating with the SEC's investigation.
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WEALTH MANAGEMENT: The Future Proof conference spanned four days last week and covered nearly every significant topic involved with wealth management — with enough time in between for a live music show.
Some 4,200 financial advisors and other industry professionals traveled to Huntington Beach, California for the third annual installment of what’s come to be known as the world's largest wealth festival. Musical headliner Third Eye Blind followed in the footsteps of Method Man and Red Man and Big Boi as a sonic accompaniment adding to a massive outdoor event amid the palm trees and a steady sea breeze from the nearby beach. World renowned chef and humanitarian José Andrés made an appearance this year as well. Besides the draw of those bold-faced names and live broadcasting setups for CNBC and Bloomberg News, Future Proof delivered on substance as well — here are key takeaways.
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