These written insurance policies and procedures “did not adequately handle Hennig’s Battle of Curiosity Obligation as a result of, amongst different issues, they didn’t present any steering or procedures for a way the agency was to attain these objectives,” the SEC stated.
In January 2021, after an examination by the Monetary Business Regulatory Authority, FINRA requested that Hennig take motion to replace and proper its written insurance policies and procedures associated to Reg BI.
When the SEC’s Division of Examinations examined Hennig in June 2021, “Hennig had not but taken motion ample to convey its written insurance policies and procedures” into compliance with Reg BI, the order states.
Because of this, in Might 2022, the SEC issued a deficiency letter to Hennig noting that Hennig’s written insurance policies and procedures nonetheless did not adjust to Reg BI.
In January 2023, Hennig adopted new written insurance policies and procedures associated to Reg BI, together with written insurance policies and procedures associated to its battle of curiosity obligation, disclosure obligation, and care bligation.
Type CRS Failures
From their adoption in June 2020 by means of January 2023, Hennig’s written insurance policies and procedures associated to its Disclosure Obligation said that Hennig’s Type CRS would “handle all accessible companies Hennig affords by means of its brokerage accounts and advisory platforms and the charges related to each.”
The order states that Hennig additional disclosed in its Type CRS that the “main charges” paid by the shoppers for brokerage companies are “transaction-based charges … usually referred to as commissions, gross sales costs, hundreds, promoting concessions, or trails.”
Nonetheless, “Hennig’s written insurance policies and procedures weren’t moderately designed to offer further info past that mentioned in its Type CRS to its clients,” the SEC stated.