Adviser Sued Re: Old Custody Rule
Philadelphia-based CMS Fund Advisers agreed last week to a censure and $115,000 penalty for failing to obtain annual surprise custody verifications, as required under the old custody rule. Although the firm had custody, the SEC alleged, it did not undergo surprise verifications for the years 2001 through 2004.
The SEC separately brought aiding and abetting charges against the firmís CFO. Interestingly, to settle the matter, the CFO agreed only to being censured. He did not pay a civil money penalty.