The Securities and Exchange Commission has ordered Jeffrey Slocum & Associates and its founder to pay $400,000 in fines after the consulting firms employees violated its gift policy by allegedly accepting Masters golf tournament tickets from an investment manager.
Between June 2011 and October 2014, Jeffrey Slocum & Associates disseminated marketing materials to at least 14 current or prospective clients explaining its strict practice of not accepting anything of value from investment managers, according to an SEC document this month. The regulator says that some materials stated the firm has never, not once, taken even so much as a nickel from an investment manager, under any guise.
Yet during that time, employees at the consulting firm allegedly accepted tickets from a manager to the 2012 and 2013 Masters golf tournaments, according to the SEC. The regulator ordered the firm to pay a civil penalty of $300,000 for the misstatements about its gift policy, while founder Jeffrey Slocum was fined $100,000, the document shows.
According to the SEC, Jeffrey Slocum & Associates policy permitted the acceptance of gifts under certain circumstances, requiring employees to obtain pre-approval from the chief compliance officer or general counsel before accepting presents worth more than $100. While two employees who were given Masters tickets in 2012 obtained approval before accepting them, four employees who were gifted tickets by a manager in 2013 did not. When the violation was discovered, the SEC alleges that Slocum softened the disciplinary action proposed by the chief compliance officer and the employees were permitted to accept the tickets as gifts.
The employees were not formally disciplined for their violation of the gift policy, the SEC says in the document. The regulatory alleges that the leniency went against marketing materials between January 2012 and August 2014 that said the firm actively guards against any actual or potential conflicts of interest by enforcing a strict code of ethics to which all employees must adhere to remain on staff.
The business of Jeffrey Slocum & Associates including 130 clients, $123 billion in advisory assets, and $1 billion under discretion was acquired last year by Pavilion Financial Corp. Slocum planned to retire from institutional consulting after a brief transition period, according to Pavilions announcement in September about the purchase.
A spokesperson for Pavilion said Friday that the firm did not purchase the entirety of Jeffrey Slocum & Associates and that it had nothing to do with the SECs action.
Jeffrey Slocum & Associates also provided misleading materials to at least 33 clients or prospective clients containing hypothetical and back-tested performance data about value added by the firms manager recommendations, according to the SECs charges.