The SEC reached a settlement with Yanni Partners and its president, Theresa A. Scotti, after a three-year investigation and administrative proceeding regarding conflicts of interest. Yanni Partners and Ms. Scotti agreed to pay civil penalties of $175,000 and $40,000 respectively, to settle the matter without admitting or denying the SECs findings.
According to documents released by the SEC, Yanni Partners didnt adequately disclose to potential pension fund clients that its database to assist clients in money manager selection was also used to provide additional revenue. The SEC said Yanni sold subscriptions to a monthly performance evaluation report based on database information to between 30 and 40 money managers that it also recommended to clients. Money managers paid $13,500 annually for the reports; Yanni took in $600,000 between 2002 and 2004 from the service. The SEC said Yannis ADV discussed the money manager subscription practice, but that not all RFP/RFI documents issued to potential clients made the same disclosure. The subscription service was stopped in 2005 and a chief compliance officer was appointed by Yanni to address potential conflicts of interest, according to the SEC.
Ms. Scotti said: We are obviously disappointed that we did not meet the SECs standards regarding this disclosure issue, but are pleased that the three-year investigation is behind us. We corrected the problem two and one-half years ago and appreciate that our clients have remained very loyal during this time.