SEC Press Releases·Sep 28, 2026, 1:46 PM ET

SEC Charges Registered Investment Adviser Zoe Financial for Failure to Disclose Conflict of Interest

The SEC charged New York-based Zoe Financial Inc. for failing to fully disclose material conflicts of interest to clients.
Zoe Financial operated an algorithmic referral service but its salespeople often recommended additional advisers beyond algorithm-generated matches.
The firm launched Zoe Wealth in January 2023 to offer sub-advisory services & back-office support, creating a financial incentive for network advisers to use it.
Although the algorithm did not factor in Zoe Wealth usage, salespeople frequently suggested advisers using that service without adequate disclosure.
Zoe Financial did not adequately disclose this conflict in its Form ADV Brochure until December 2024.
The firm failed to accurately describe how it mitigated conflicts arising from indirect minority interests held by certain advisory firms.
Zoe Financial willfully violated Section 206(2) of the Investment Advisers Act of 1940.
Without admitting findings, Zoe Financial agreed to a cease-and-desist order, a censure, & a $450,000 civil monetary penalty.
The SEC acknowledged remedial measures taken by Zoe Financial, including compliance manual revisions & hiring an in-house chief compliance officer.