SEC Charges Registered Investment Adviser Zoe Financial for Failure to Disclose Conflict of Interest

The Securities and Exchange Commission today announced settled charges against New York-based investment adviser Zoe Financial Inc. for failing to fully and fairly disclose material facts concerning conflicts of interest to its clients and prospective clients. According to the SEC order, Zoe Financial operated a referral service which used an algorithm to match third-party investment advisers in its network with individuals seeking a recommendation for an investment adviser. Zoe Financial salespeople typically would then follow up with individuals who did not schedule a meeting with one of the matches generated by the algorithm, and in ensuing conversations, salespeople often recommended additional advisers to the client, beyond the recommendations generated by the algorithm.