UIT Sponsor Charged with Misleading Investors

September 18, 2013

The SEC brought an administrative action against Sarkauskas & Associates, Inc., a Wisconsin-based investment adviser, and its principal, James Sarkauskas, finding that they violated Sections 206(1) and (2) of the Advisers Act when they purchased unit investment trust (UIT) units bearing transactional sales charges in their clients' accounts without disclosing that identical no-load UIT units sold at net asset value with no transactional sales charges were available for purchase. The SEC stated that the adviser's purchases of the units bearing transactional sales charges substantially increased its compensation, thereby creating a conflict of interest. The SEC further found that between August 2009 and August 2012, the adviser, through Sarkauskas, collected $331,433.98 in such sales charges in addition to the adviser's asset management fees.
Click here for the administrative action.


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Investment Advisers