Manheim Township-based investment advisory firm, Ambassador Advisors LLC, and its three executives, have lost their fight against the Securities and Exchange Commission over failing to make disclosures to clients.
The decision came after a recent eight-day jury trial in Allentown.
A final order that would typically include potential monetary penalties and compensation for clients has been held up until after a Thursday conference call, according to the court docket entry. The case involves $270.6 million to $489.6 million managed assets of between approximately 2,600 and 4,300 client accounts, mostly belonging to individuals, according to court documents.
The SEC said Ambassador, based at 1755 Oregon Pike, and its principals, Bernard I. Bostwick, Robert E. Kauffman and Adrian E. Young, directed clients’ investments to mutual funds with higher fees, which they received. The SEC said Ambassador did not give clients enough information about conflicts of interest. The investigation focused on the business between 2014 and 2018.
In a statement after the jury trial, Ambassador said that the convoluted nature of the issue led the jury to side with the SEC. Ambassador said it fought the regulator for two years rather than settle because it claimed the SEC’s enforcement effort was creating new regulation without following the formal rule-making process….
