United States SEC Fines One Oak Capital Management & ex-Advisor Michael DeRosa $225,000 for Advisory Misconduct, Converted 180 Brokerage Accounts to Advisory Accounts with Majority are Elderly Clients, Failure in Fiduciary Duty & Disclosure to Clients of Higher Fees in Advisory Fees & Increased Compensation for Michael DeRosa Resulting in Conflict of Interest, Clients Received No Additional Services or Benefits after Converting from Brokerage to Advisory Accounts, Michael DeRosa Suspended for 9 Months
16th February 2025 | Hong Kong
The United States Securities and Exchange Commission (SEC) has fined One Oak Capital Management & ex-advisor Michael DeRosa $225,000 for advisory misconduct, converting more than 180 brokerage accounts to advisory accounts with majority are elderly clients. One Oak Capital Management & ex-advisor Michael DeRosa failed in their in fiduciary duty & disclosure to clients of higher fees in advisory fees & increased compensation for Michael DeRosa resulting in conflict of interest. Clients received no additional services or benefits after converting from brokerage to advisory accounts. The United States SEC has also issued a 9-month suspension on Michael DeRosa. United States SEC (14/2/25): “The Securities and Exchange Commission today filed settled charges against New York-based registered investment adviser One Oak Capital Management LLC, and former One Oak investment adviser representative, Michael DeRosa, for misconduct related to advisory services provided to their retail clients. According to the SEC’s order, from approximately June 2020 through October 2023, One Oak and DeRosa recommended that DeRosa’s customers at an unaffiliated broker-dealer, at which he was simultaneously employed, convert more than 180 brokerage accounts to advisory accounts at One Oak. Most of these customers were elderly and had been long-time customers of DeRosa’s at the broker-dealer, which charged the customers on a commission basis. According to the order, One Oak and DeRosa ignored their fiduciary duty and failed to adequately disclose that the conversions from brokerage accounts to advisory accounts would result in significantly higher fees for the clients and increased compensation for DeRosa; nor did they disclose the resulting conflict of interest. The order finds that the change in fee structure resulted in significantly increased costs, but the clients generally received no additional services or benefits. The order further finds that One Oak and DeRosa failed to adequately consider whether it was in their clients’ best interests to convert their brokerage accounts to advisory accounts, and in fact, many of the accounts were not suitable to be advisory accounts. The SEC’s order finds that One Oak and DeRosa willfully violated the antifraud provisions of Section 206(2) of the Investment Advisers Act of 1940, and that One Oak also violated the compliance rule provisions of the Advisers Act. Without admitting or denying the SEC’s findings, One Oak consented to an order requiring it to pay a civil penalty of $150,000 and to retain an independent compliance consultant to review certain of its policies and procedures related to its retail business. Without admitting or denying the findings in the order, DeRosa agreed to a civil penalty of $75,000 and to a nine-month industry suspension.”
“ United States SEC Fines One Oak Capital Management & ex-Advisor Michael DeRosa $225,000 for Advisory Misconduct, Converted 180 Brokerage Accounts to Advisory Accounts with Majority are Elderly Clients, Failure in Fiduciary Duty & Disclosure to Clients of Higher Fees in Advisory Fees & Increased Compensation for Michael DeRosa Resulting in Conflict of Interest, Clients Received No Additional Services or Benefits after Converting from Brokerage to Advisory Accounts, Michael DeRosa Suspended for 9 Months “
United States SEC Fines One Oak Capital Management & ex-Advisor Michael DeRosa $225,000 for Advisory Misconduct, Converted 180 Brokerage Accounts to Advisory Accounts with Majority are Elderly Clients, Failure in Fiduciary Duty & Disclosure to Clients of Higher Fees in Advisory Fees & Increased Compensation for Michael DeRosa Resulting in Conflict of Interest, Clients Received No Additional Services or Benefits after Converting from Brokerage to Advisory Accounts, Michael DeRosa Suspended for 9 Months
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