On 28 May 2019, the SEC (The Securities and Exchange Commission) charged investment adviser Stephen Brandon Anderson with fraud. The specific fraud was overcharging of advisory fees to his clients.
Anderson owned River Source Wealth Management, LLC, a registered investment adviser in North Carolina. River Source’s primary revenue was customer advisory fees. Customer agreements provided that those fees would be based on each customer’s assets under management. River Source is now out of business.
According to the SEC, in 2015 and 2016, Anderson overcharged his clients. The amounts were about 40% more than the agreed fees. Anderson also misled his clients about the reason he transferred their assets from River Source’s asset custodian, falsely stating that it was his decision when the asset custodian ended the relationship with River Source after noting irregular billing practices.