Voya Financial Advisors will pay nearly $3.1 million because of payments it got from its clearing broker in relation to mutual fund sales. The firm settled a cease-and-desist order from the SEC and will pay $2.6 million in disgorgement, $175,000 in prejudgment interest, and $300,000 in civil penalties.

According to the Securities and Exchange Commission, Voya failed to disclose to its customers the compensation it got from its clearing firm for selling mutual funds. The firm’s website states that Pershing LLC is its clearing broker.

Fundamentally, the Commission stated that in its arrangement with Pershing, Voya would obtain a portion of the platform fee paid by mutual fund companies to Pershing in return for particular administrative services Voya performed.

“These payments created a conflict of interest in that they provided a financial incentive for Voya Financial Advisors to favor the mutual funds in the clearing firm’s no-transaction-fee mutual fund program over other investments when giving investment advice to its advisory clients,” stated the Commission, which also claims that Voya did not disclose this agreement or the resulting conflict of interests in its disclosures to its advisory customers.

The Frankowski Firm has years of experience representing investors who have lost money as the result of Ponzi or other fraudulent schemes. If you or someone you know has lost money as a result of such a scheme, please contact Richard Frankowski at 888-741-7503 to discuss your potential legal remedies or complete the contact form.