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The settlement "sends a clear message that investment advisers must always act in the best interests of their advisory clients, even if those clients are sophisticated investors," George Canellos, the SEC's deputy enforcement director, said in a statement. The SEC conducted a wide-ranging investigation of financial firms' actions in the run-up to the financial crisis of 2008, and CDO transactions were a major focus. The big banks that put together and sold CDOs retained investment firms like ICP to manage the transactions as third parties. JPMorgan Chase & Co. resolved similar charges with the SEC in June 2011, agreeing to pay $153.6 million. Citigroup Inc. agreed to pay $285 million to settle, though that was struck down by a federal judge last November. Last month Wells Fargo's brokerage firm agreed to pay $6.58 million to settle SEC charges that it failed to adequately inform investors about the risks tied to mortgage securities it sold. The firm improperly sold the high-risk investments to cities and towns, nonprofit institutions and other investors in 2007, when the housing market was unraveling, according to the SEC.
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