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Financial firms face fines for missing Y2K deadlines

The Securities and Exchange Commission slaps nine money management firms with heavy fines for failing to adequately report their Year 2000 readiness.

The Securities and Exchange Commission slapped nine money management firms with heavy fines for failing to adequately report their Year 2000 readiness.

As part of its campaign to protect investors by ensuring companies are fully disclosing their Y2K preparations, the regulatory agency settled with two other investment advisers and two transfer agents on similar charges.

Back to Year 2000 Index Page Issuers, their representatives, and investors are encouraged by the SEC to assess the Year 2000 readiness of firms in the securities industry by reviewing their Y2K filings.

Within the past year, the commission has filed actions charging a total of 37 broker-dealers, 13 investment advisers, and 15 transfer agents for failing to report their Year 2000 preparedness. No charges were brought against broker-dealers today because they filed their Y2K status forms as required.

"We place great importance on full and fair Y2K disclosure by those we regulate. With only four months left to the millennium, it is vital that both investors and regulators be given a current report card by each firm as to their state of readiness. We are pleased that, with few exceptions, firms made the required filings," SEC director of enforcement Richard H. Walker said in a statement.

The SEC alleged that investment advisers Huber Hogan Consulting of Red Bank, New Jersey; Russon Financial Services of Woodland Hills, California; and Robert Sears of Northampton, Massachusetts, didn't file all or part of the required BD-Y2K form that was due June 7.

Two of the five investment advisers--Amervest in Los Angeles and KMI Realty Advisors in Indianapolis--settled with the commission by agreeing to the entry of an order to cease and desist from further violations, and pay a civil penalty of $22,500 and $15,000, respectively.

The other three investment advisers charged by the commission are contesting the charges.

The agency also charged Peachtree Stock Transfer and its principal Robert Crain Jr. of Memphis, Tennessee for failing to file timely updated form TA-Y2K with the SEC, which was due April 30.

Transfer agent Bassett Furniture Industries of Bassett, Virginia, agreed to pay a $5,000 civil fine and agreed to a cease-and-desist order and to be censured.

Thermal Energy Storage of San Diego also settled with the regulator to cease and desist and be censured but wasn't fined because of its inability to pay, the SEC said.

For the investment advisers and transfer agents that have not settled with the commission, hearings will be held to assess the validity of the charges and determine if remedial sanctions are appropriate and in the public interest.