SALT LAKE CITY–CUSO Financial Services has responded strongly to allegations made by Utah’s Division of Securities alleging it used deceptive advertising to mislead members of America First CU that it is part of the credit union.
As CUToday.info reported, CUSO Financial Services along with Cetera Advisor Networks and LPL Financial were assessed a combined $2.25 for what the regulator said were rules violations.
But in a 41-page response, CUSO Financial Services said it “provided numerous and fulsome disclosures of its role as a non-deposit investment service provider on all marketing materials, including but not limited to signage, posters, business cards, brochures, websites and other advertising materials,” according to a report by Bank Investment Consultant.
The company further rejected the UDS’ objection to the use of the marketing name America First Financial Solutions, which the regulator said was misleading. In response, CUSO said that the name was a “department identifier” and that it was always used in conjunction with the disclosure that it was “available through CUSO Financial Services,” Bank Investment Consultant reported.
The company also responded to the regulator’s criticism that the credit union’s logo in marketing and other materials appeared more prominently than that of the firm’s, Bank Investment Consultant said. “The presence of [CUSO’s] name in direct proximity of the department identifier within the signage in every instance properly distinguishes that [CUSO] is the provider of financial services, notwithstanding any purported discrepancy in the size of the respective logos,” CUSO Financial Services said in its response.
Company Acknowledges One Violation
The company did acknowledge that its advisors answered the phone as America First Financial Solutions rather than CUSO Financial Services. CUSO representatives are required to identify the CUSO when answering the phone and in all outgoing voicemail greetings and messages, it noted in its response, Bank Investment Consultant said.
Responding to the Utah’s Division of Securities’ allegations that it engaged in dishonest and unethical conduct by splitting commissions, profits and other compensation with the credit union, which is not licensed as a broker-dealer or investment advisor, CUSO Financial Services said its compensation-sharing arrangements with the credit union as provided for in their networking agreement was compliant with all applicable rules, regulations and laws, according to Bank Investment Consultant.