The Securities and Exchange Commission (SEC) announced on September 28, 2026, that it had sanctioned Zoe Financial Inc., a New York-based investment adviser, for failing to fully and fairly disclose conflicts of interest to its clients and prospects.
According to the SEC order, Zoe Financial operated a recommendation service using an algorithm to connect clients with financial advisers. However, Zoe Financial’s sales personnel frequently recommended advisers not generated by the algorithm, which was not clearly disclosed.
In January 2023, Zoe Financial launched “Zoe Wealth,” offering sub-advisory and administrative support services to its network of advisers. The SEC found that Zoe Financial had a financial interest in encouraging the use of Zoe Wealth and that this conflict of interest was not adequately disclosed in its Form ADV brochure until December 2024.
Additionally, although Zoe Financial disclosed that certain firms held indirect minority stakes, it did not properly explain how it managed this conflict.
The SEC concluded that Zoe Financial willfully violated Section 206(2) of the Investment Advisers Act of 1940. Without admitting or denying the findings, Zoe Financial agreed to a cease-and-desist order, a censure, and the payment of a $450,000 civil penalty. The firm also took remedial measures, including revising its compliance manual and hiring an internal compliance officer.
