Wbi Investments, Llc

Allegations: THE SEC'S ORDER INSTITUTING ADMINISTRATIVE AND CEASE-AND-DESIST PROCEEDINGS RELATES TO ALLEGATIONS THAT WBI INVESTMENTS, LLC AND ITS AFFILIATE, MILLINGTON SECURITIES, LLC, MADE MATERIAL MISSTATEMENTS CONCERNING PAYMENTS THAT MILLINGTON RECEIVED FOR SENDING CLIENT ORDERS TO OTHER BROKERAGE FIRMS FOR EXECUTION, AS WELL AS ALLEGATIONS THAT WBI AND MILLINGTON FAILED TO ADOPT AND IMPLEMENT WRITTEN POLICIES AND PROCEDURES REASONABLY DESIGNED TO PREVENT VIOLATIONS OF SECTION 206(2) OF THE ADVISERS ACT. Status: Final Sanction Detail: WBI AGREED TO A CENSURE, A $750,000 CIVIL MONEY PENALTY PAYABLE TO THE SEC, PAYABLE WITHIN 365 DAYS OF THE ENTRY OF THE ORDER, AND TO CEASE AND DESIST FROM COMMITTING OR CAUSING ANY VIOLATIONS AND ANY FUTURE VIOLATIONS OF SECTIONS 206(2) AND 206(4) OF THE ADVISERS ACT AND RULE 206(4)-7 PROMULGATED THEREUNDER. AS PART OF THE ORDER, WBI'S AFFILIATE, MILLINGTON, SEPARATELY AGREED TO A CENSURE, A $250,000 CIVIL MONEY PENALTY (PAID ON AUGUST 7, 2020) AND TO CEASE AND DESIST FROM COMMITTING OR CAUSING ANY VIOLATIONS AND ANY FUTURE VIOLATIONS OF SECTIONS 206(2) AND 206(4) OF THE ADVISERS ACT AND RULE 206(4)-7 PROMULGATED THEREUNDER. Summary: AS NOTED IN WBI'S FORM ADV, WBI ROUTES CLIENT ORDERS TO ITS AFFILIATE, MILLINGTON, FOR FURTHER ROUTING AND EXECUTION. AS A GENERAL MATTER, MILLINGTON ROUTES ORDER FLOW TO CERTAIN MARKET MAKERS FOR EXECUTION. DURING THE RELEVANT PERIOD, MILLINGTON RECEIVED PER SHARE PAYMENTS (E.G., PAYMENT FOR ORDER FLOW) FROM DESTINATION MAKER MAKERS. WHILE, AS NOTED IN THE ORDER, WBI EXPRESSLY DISCLOSED THE EXISTENCE OF THESE PAYMENT FOR ORDER FLOW ARRANGEMENTS IN THE FIRM'S FORM ADV FILINGS, AND WBI AND MILLINGTON SEPARATELY IDENTIFIED IN OTHER DOCUMENTS THE PAYMENT FOR ORDER FLOW RATE PAID BY THE EXECUTING BROKERS, INCLUDING THE AMOUNT OF PAYMENT RECEIVED BY MILLINGTON ON A TRADE-BY-TRADE BASIS, THE ORDER NEVERTHELESS FINDS THAT CERTAIN STATEMENTS MADE BY REPRESENTATIVES OF WBI AND MILLINGTON REPRESENTED MATERIAL MISREPRESENTATIONS AS THE STATEMENTS DID NOT FULLY ADDRESS THE IMPACT OF THESE ARRANGEMENTS ON EXECUTION PRICES. PRIOR TO ISSUANCE OF THE ORDER, WBI AND MILLINGTON UPDATED THEIR RESPECTIVE DISCLOSURES REGARDING THE PAYMENT FOR ORDER FLOW ARRANGEMENTS. AS A RESULT OF THE ABOVE CONDUCT, THE SEC FOUND THAT WBI AND MILLINGTON WILLFULLY VIOLATED SECTIONS 206(2) AND 206(4) OF THE INVESTMENT ADVISERS ACT OF 1940 ("ADVISERS ACT") AND RULE 206(4)-7 PROMULGATED THEREUNDER. WBI AND MILLINGTON, WITHOUT ADMITTING OR DENYING ANY OF THE FINDINGS OR CONCLUSIONS, EXCEPT AS TO THE SEC'S JURISDICTION OVER MILLINGTON AND THE SUBJECT MATTER OF THE ORDER, CONSENTED TO THE ENTRY OF THE ORDER, TO CEASE AND DESIST FROM COMMITTING OR CAUSING ANY VIOLATIONS AND ANY FUTURE VIOLATIONS OF SECTIONS 206(2) AND 206(4) OF THE ADVISERS ACT AND RULE 206(4)-7 PROMULGATED THEREUNDER, TO A CENSURE AND TO A CIVIL MONEY PENALTY IN THE AGGREGATE AMOUNT OF $1,000,000 ($750,000 OF WHICH WAS PAYABLE BY WBI).