SEC Sues Brite Advisors USA Over Client Asset Safety, Conflicts

Brite Advisors USA Inc. failed to give US regulators annual reports of internal controls and violated its fiduciary duty to clients by failing to disclose conflicts of interest, a lawsuit says.

The adviser, an affiliate of Australian company Brite Advisors Pty Ltd., allegedly hid risks related to an arrangement wherein the parent company borrowed more than $32 million in loans backed by Brite USA’s client assets, according to the complaint filed Tuesday in US District Court for the Southern District of New York.

The so-called custody rule compliance failures alleged by the Securities Exchange Commission are ongoing and have been ...