2023077597702 Colorado Financial Service Corporation CRD 104343 AWC lp.pdf
Closed-end funds (CEFs) offer investment advantages such as access to specialized or
illiquid assets. They may, however, present unique risks based on their complexity,
illiquidity, leverage, and/or investment in speculative assets. From March 2021 to at least
February 2023, Colorado Financial failed to reasonably supervise and have reasonably
designed policies and procedures regarding recommendations to purchase CEFs investing
in high-yield, below-investment-grade debt securities, some of which were leveraged and
all of which were inconsistent with customers’ investment profiles.