Deals & People July 16, 2007

CAPTRUST Snaps Up Raleigh Advisory Firm

CAPTRUST didn't have to look far for its latest acquisition.
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CAPTRUST Financial Advisors, an investment research and advisory firm, headquartered in Raleigh, North Carolina, has announced the acquisition of Atlantic Capital Management – also based in Raleigh, North Carolina.

Organized in 1994, Atlantic Capital Management provides financial advisory services primarily to corporate executives, high net worth individuals, and affluent families representing over $500 million in assets. In addition to its Raleigh office, CAPTRUST has offices in Atlanta, Charlotte, Philadelphia, and Richmond. The firm provides advisory services to clients representing over $20 billion in assets.

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Expanded NC Presence

As a result of the acquisition, CAPTRUST will expand its presence in North Carolina and strengthens its service offerings to institutional investors, primarily affluent families and corporate executives that require independent and objective advice, according to a press release.

As part of the transaction, a majority of the Atlantic Capital Management staff will join CAPTRUST, including President John Pullen, who joins the company with over 28 years of industry experience.

“A key part to our growth strategy is to identify like-minded advisory firms with significant and specialized industry experience. A major competitive advantage for these firms and their clients joining CAPTRUST is that they will benefit from our research, services, and cutting edge infrastructure. Atlantic Capital represents another successful step for our national growth strategy and we are thrilled with the addition of Atlantic Capital to the CAPTRUST team,’ said Fielding Miller, CEO of CAPTRUST.

Compliance July 16, 2007

UBS Settles Fee-based Brokerage Account Suit with NY Attorney General

UBS has reached a $23.3 million settlement agreement with New York Attorney General Andrew Cuomo to quell allegations that the investment bank engaged in ‘steering customers into the fee-based accounts of its InsightOne brokerage accounts.’
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The settlement agreement was announced in a press releasefrom the Attorney General’s office and calls for UBS to reimburse customers $21.3 million and pay $2 million in penalties.

“UBS convinced customers to rely on its advice and then abused that trust,’ said Attorney General Andrew Cuomo, in the announcement. “This major settlement is a win for customers inappropriately pushed into unsuitable brokerage accounts and a warning to the entire industry that customers’ interests must come first.’ UBS denies the allegations in the press release that it that it betrayed its clients’ trust, but settled to skirt litigation.

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The settlement was reached after an investigation led to a lawsuit that asserted UBS placed thousands of traditional brokerage customers to InsightOne accounts, falsely promising comprehensive and sophisticated financial planning services.

Specifically, the charges against UBS that were filed in New York County Supreme Court in December 2006 were as follows:

  • UBS was fully aware that InsightOne would be inappropriate and more costly for traditional brokerage customers who made few trades per year.
  • UBS financially gave brokers incentives to switch customers into accounts regardless of whether the accounts fit their needs, and then charged customers millions of dollars in unnecessary fees.
  • UBS failed to responsibly prescreen customers before recommending unsuitable InsightOne accounts.

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