SEC Cracks Down on Hidden Charges

  • Raskob Kambourian Financial Advisors agreed to pay $1.8 million to settle allegations of not disclosing fee increases
  • SEC said Raskob Kambourian charged $1.36 million more in fees than authorized under client agreements
  • The firm didn’t inform clients about fee changes in a timely manner, breaching fiduciary duties
  • Raskob Kambourian was registered with the SEC until October 2023 and is currently registered with Arizona’s securities regulator

Raskob Kambourian Financial Advisors has agreed to pay a hefty sum of approximately $1.8 million to settle allegations made by the Securities and Exchange Commission (SEC) for failing to disclose increased fees to clients. The SEC claims that the firm charged 59 clients an additional $1.36 million in fees than what was authorized under the fee schedules set forth in client agreements. The Tucson-Ariz.-based registered investment advisor consented to the entry of a final judgment without admitting or denying the allegations. The penalty includes the alleged overcharges, interest, and an additional monetary penalty. Raskob Kambourian periodically increased fees but did not disclose these changes in written materials or inform clients promptly, which was a breach of its fiduciary duties. The firm has 75 clients and $77 million in assets under management.

Factuality Level: 8
Factuality Justification: The article provides accurate information about the settlement between Raskob Kambourian Financial Advisors and the Securities and Exchange Commission, including details of the allegations and the amount to be paid. It also mentions the time period during which the fee increases occurred and the firm’s registration status. However, it lacks personal opinions or sensationalism.
Noise Level: 4
Noise Justification: The article provides relevant information about a financial advisor being held accountable for failing to disclose fee increases to its clients and facing consequences from the Securities and Exchange Commission. It also includes details on the amount of overcharges and the firm’s current registration status. However, it could benefit from more analysis or context on the broader implications of this case in the industry.
Private Companies: Raskob Kambourian Financial Advisors
Key People:

Financial Relevance: Yes
Financial Markets Impacted: Raskob Kambourian Financial Advisors
Financial Rating Justification: The article discusses a financial advisory firm being accused of failing to disclose fee increases and agreeing to pay a settlement, which impacts the company itself and potentially affects its clients’ trust in financial management services.
Presence Of Extreme Event: No
Nature Of Extreme Event: No
Impact Rating Of The Extreme Event: Minor
Extreme Rating Justification: There is no extreme event mentioned in the article.
Move Size: No market move size mentioned.
Sector: All
Direction: Down
Magnitude: Large
Affected Instruments: Stocks

Reported publicly: www.barrons.com