In December 2020, the Securities and Exchange Commission (SEC) settled charges with Voya Financial Advisors, Inc. regarding the firm’s “disclosure failures and misleading statements to clients regarding investment advice it gave about mutual funds, illiquid alternative investments and cash sweep vehicles. The settlement includes a distribution of money to harmed clients of the retail advisory firm and Voya’s retention of an independent compliance consultant.” The SEC found that Voya Financial Advisors, Inc. violated antifraud provisions.
Voya Financial Advisors, Inc. will disgorge $11,547,820 plus prejudgment interest of $2,371,335, and will pay a civil penalty of $9 million.
According to the SEC, between January 2013 and December 2018, Voya Financial Advisors, Inc. engaged in practices that violated its fiduciary duty to its advisory clients, including:
- made misleading statements and provided inadequate disclosures regarding its receipt of 12b-1 fees from client investments.
- purchased or recommended certain cash sweep money market funds for advisory clients for which it received undisclosed revenue-sharing payments. As a result, Voya’s advisory clients generally received lower performance and paid higher fees than they otherwise would have.
- caused some advisory clients to pay higher fees, in the form of upfront commissions, when purchasing illiquid alternative investment products when those same investments were available with the upfront commissions waived.
- provided misleading comparisons to clients when it recommended that clients move from money market funds to a bank sweep product.
Pursuant to FINRA Rules, member firms are responsible for supervising a broker’s activities during the time the broker is registered with the firm. Therefore, Voya Financial Advisors, Inc. may be liable for investment or other losses suffered by its customers.
Erez Law represents investors in the United States for claims against brokers and brokerage firms for wrongdoing. If and have experienced investment losses, please call us at 888-840-1571 or complete our contact form for a free consultation. Erez Law is a nationally recognized law firm representing individuals, trusts, corporations and institutions in claims against brokerage firms, banks and insurance companies on a contingency fee basis.