Robare Group Ltd received a percentage of every
dollar that its clients invested in the mutual funds, the SEC
said in the complaint. That gave the firm and co-owners Mark
Robare and Jack Jones Jr. an incentive to recommend the funds to
clients over other investment opportunities, the SEC said. The
conflict of interest, which was unknown to investors, generated
about $440,000 in additional revenue for the firm, the SEC said.
"We deny the charges. We intend to defend the allegations
vigorously," said Alan Wolper, a Chicago-based lawyer who is
representing the firm and its co-owners. They look forward to
hearing the SEC's evidence and, ultimately, to prevailing,
The SEC action does not identify the broker or funds related to
the dispute. The firm managed about $150 million as of August
2013, according to the SEC.
Robare Group revised its public disclosure form in late 2011 to
disclose the compensation arrangement, but the SEC says the same
form and more recent ones "falsely stated" that Robare did not
receive an economic benefit from non-clients for giving
The disclosures were not adequate because they said Robare Group
"may" receive compensation from the broker for selling the
mutual funds, when it was definitely receiving payments, the SEC
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