SEC Charges Affiliated Advisers for Misrepresentations About Payment for Order Flow Arrangements

The Securities and Exchange Commission today filed settled charges against affiliated registered investment advisers WBI Investments Inc. and Millington Securities Inc. for making material misrepresentations to clients about compensation Millington received in an institutional payment for order flow arrangement for routing client orders to certain brokerage firms for execution. As part of the settlement, WBI and Millington agreed to pay a combined total of $1 million in penalties. According to the SEC’s order, WBI and Millington served as advisers to a series of mutual funds and a series of exchange-traded funds, among other clients. The order finds that Millington, which also served as WBI’s primary introducing broker, agreed to route WBI’s client orders to certain brokerage firms that agreed to pay Millington amounts they characterized as “payments for order flow.” According to the order, the payments to Millington were $0.0125 to $0.0150 per share.