Securities Lawyers Blog
According to records kept by The Financial Industry Regulatory Authority (FINRA) financial Broker Michael Derosa (Derosa), previously associated with Fox Chase Capital Partners, LLC, has at least one disclosable event. These events include one regulatory, alleging that Derosa recommended unsuitable investments in different investment products including debt securities among other allegations and complaints.
FINRA BrokerCheck shows a final customer complaint on February 14, 2025.
The Securities and Exchange Commission (‘Commission’) deems it appropriate and in the public interest that public administrative and cease-and-desist proceedings be, and hereby are, against One Oak Capital Management, LLC (‘One Oak’); and against Michael DeRosa (‘DeRosa’) (together, ‘Respondents’). In anticipation of the institution of these proceedings, Respondents have submitted Offers of Settlement (the ‘Offers’) which the Commission has determined to accept. The commission finds that from approximately June 2020 through October 2023 (the ‘Relevant Period’), One Oak, a registered investment adviser, and one of its investment adviser representatives, Michael DeRosa, failed adequately to disclose advisory fees to certain clients converting their brokerage accounts at an unaffiliated broker-dealer to advisory accounts at One Oak (the ‘Converted Accounts’). As a result of these conversions, One Oak and DeRosa charged the Converted Accounts advisory fees based on a percentage of assets under management, rather than just brokerage commissions, as they were previously charged by the broker-dealer. Because the Converted Accounts had relatively little trading activity before and after the conversions, the change in fee structure resulted in significantly increased costs for clients, even though these clients generally received no additional services or benefits. One Oak and DeRosa therefore placed their financial interests ahead of the interests of the prospective clients in recommending the conversions. In addition, One Oak and DeRosa did not conduct meaningful reviews of the clients’ investment profiles or the characteristics of the two account types. As a result, One Oak and DeRosa did not have a reasonable basis to believe that an advisory account was in their clients’ best interests, either at the time of conversion or thereafter. In fact, many of the Converted Accounts were not suitable to be advisory accounts. One Oak also had compliance deficiencies related to the Converted Accounts during the Relevant Period. Additionally, for many of the Converted Accounts, One Oak did not provide a Form ADV at the time of account opening. As a result of this conduct, One Oak willfully violated Advisers Act Sections 204, 206(2), and 206(4) and Rules 204-3 and 206(4)-7 thereunder, and DeRosa willfully violated Section 206(2) of the Advisers Act.
