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SEC Fines American Portfolios Advisors $1.75 Million for Overbilling and Undisclosed Conflicts

Posted on August 27th, 2025 at 12:38 PM
SEC Fines American Portfolios Advisors $1.75 Million for Overbilling and Undisclosed Conflicts

From the desk of Jim Eccleston at 麻花传媒

The Securities and Exchange Commission (SEC) has fined American Portfolios Advisors $1.75 million for a series of violations that occurred between August 2020 and March 2023, including overbilling advisory clients and failing to disclose conflicts of interest tied to compensation arrangements.

According to InvestmentNews, the SEC found that American Portfolios Advisors, a registered investment advisor (RIA) formerly owned by American Portfolios Financial Services, breached its fiduciary duty by improperly charging advisory fees on alternative investment positions that should have been excluded. The firm also failed to refund pro rata fees to clients who closed their accounts mid-quarter, despite contractual obligations to do so.

Additionally, the SEC alleged that American Portfolios Advisors failed to fully disclose conflicts of interest involving its affiliated broker-dealer. Specifically, the RIA misled clients into believing an unaffiliated clearing broker determined the transaction and account service fees, when in fact the affiliated broker-dealer marked up those charges—resulting in higher costs to clients.

InvestmentNews also reports that the SEC’s order cites troubling conduct during an SEC compliance examination, including backdated documents prepared by senior executives. American Portfolios Advisors agreed to the order without admitting or denying the SEC’s findings.

While Osaic Inc. acquired the RIA’s parent company in 2022, a spokesperson clarified that the cited conduct occurred prior to the acquisition and that the SEC’s order does not reference Osaic. According to InvestmentNews, the firm closed in October 2023, as part of Osaic’s consolidation of its broker-dealer and RIA operations.

This enforcement action follows the SEC’s broader scrutiny of RIA billing practices. InvestmentNews reports that the SEC previously had warned that many advisors overcharged clients due to errors in fee calculations and failed to adequately disclose costs.

 

麻花传媒 LLC represents investors and financial advisors nationwide in securities, employment, transition, regulatory, and disciplinary matters.

Tags: eccleston, eccleston law, american portfolios advisors

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