Tr?id=566623520170033&ev=PageView&noscript=1

Ä¢¹½´«Ã½

SEC Scrutiny Intensifies Over Cash Management in Advisory Accounts

Posted on August 20th, 2024 at 11:13 AM
SEC Scrutiny Intensifies Over Cash Management in Advisory Accounts

From the desk of Jim Eccleston at Ä¢¹½´«Ã½

InvestmentNews reports that recent developments have intensified concerns about how broker-dealers manage cash in investment advisory accounts. Morgan Stanley and Ä¢¹½´«Ã½lls Fargo & Co. are currently under scrutiny from the Securities and Exchange Commission (SEC) regarding their handling of client cash balances.

Morgan Stanley recently disclosed that the SEC is seeking information about specific advisory accounts. This follows Ä¢¹½´«Ã½lls Fargo's announcement last week that it is negotiating with the SEC over an investigation into its cash sweep practices in advisory accounts.

Both firms are not alone; many broker-dealers face similar inquiries. According to InvestmentNews, with interest rates rising sharply from near zero in early 2022 to over 5 percent, the SEC is focusing on whether firms are optimizing returns on client cash.

Ä¢¹½´«Ã½lls Fargo had previously revealed an ongoing SEC investigation into its cash sweep options provided to advisory clients. The SEC is examining whether these options were appropriately disclosed at account opening.

Morgan Stanley reported that since April 2024, it has been responding to the SEC's request for information related to advisory account cash balances and compliance with the InvestmentAdvisers Act of 1940.

 

Ä¢¹½´«Ã½ LLC represents investors and financial advisors nationwide in securities, employment, transition, regulatory, and disciplinary matters.

Tags: eccleston, eccleston law, sec

Return to Archive

TESTIMONIALS

Previous
Next
Quotes Bigger

Thank you so very much for your guidance, patience, and expertise.

Beth and Steve K.

LATEST NEWS AND ARTICLES

1786734880 Law
August 14, 2026
Cash Sweep Litigation Continues to Drive Legal Costs

Cash sweep litigation continues to increase legal costs for wealth management firms despite the Securities and Exchange Commission's (SEC) decision under the Trump administration to close pending investigations without imposing enforcement penalties, according to AdvisorHub.

1786636784 Law
August 13, 2026
FINRA Orders Centaurus Financial to Pay $1.1 Million Over Variable Annuity Supervision Failures

The Financial Industry Regulatory Authority (FINRA) has ordered Centaurus Financial Inc.

1786553985 Law
August 12, 2026
Proposed FINRA Enforcement Reforms Draw Mixed Reactions From Industry Participants

A new report recommending changes to the Financial Industry Regulatory Authority's (FINRA) enforcement program has generated mixed reactions from investor advocates, securities attorneys and industry professionals, according to ThinkAdvisor.