Commitments and Contingencies

12 Months Ended

Dec. 31, 2024

Commitments and Contingencies Disclosure [Abstract]

The Company leases software, facilities, and equipment under non-cancelable operating leases, some which contain escalation clauses for increased taxes and operating expenses. The Company has entered into maintenance agreements primarily for its equipment. Rent expense, primarily related to user licenses for software, was $81,142, $71,962 and $65,792 in 2024, 2023 and 2022, respectively.

The aggregate noncancellable minimum commitments at December 31, 2024 are:


Year	Aggregate Noncancellable Minimum Commitments
2025	$	9,841
2026	9,161
2027	6,159
2028	3,281
2029 and thereafter	11,032
	$	39,474

In the ordinary course of business, the Company from time to time enters into contracts containing indemnification obligations of the Company. These obligations may require the Company to make payments to another party upon the occurrence of certain events including the failure by the Company to meet its performance obligations under the contract. These contractual indemnification provisions are often standard contractual terms of the nature customarily found in the type of contracts entered into by the Company. In many cases, there are no stated or notional amounts included in the indemnification provisions. There are no amounts reflected on the Consolidated Balance Sheets as of December 31, 2024 and 2023 related to these indemnifications.

Rubicon Wealth Management

Prior to the relationship termination described in the following sentence, SEI Private Trust Company (SPTC), a wholly-owned operating subsidiary of SEI, held custody accounts for the end-clients of Rubicon Wealth Management LLC, an SPTC investment advisor client (Rubicon). On May 1, 2024, SPTC terminated its client relationship with Rubicon in light of the events associated with the Allegation (as defined below), and notified Rubicon clients with accounts at SPTC that they were required to transfer their accounts to other custodians.

Beginning on July 10, 2024, nine of Rubicon’s clients that had custodial accounts at SPTC filed state civil actions for fraud in the Court of Common Pleas of Montgomery County, Pennsylvania against Rubicon, its founder, Scott Mason, Mr. Mason’s wife, Lynne Mason, and Orchard Park Real Estate Holdings LLC (Orchard Park), a business owned by the Masons. The fraud allegation (the Allegation) is based on the claim that Mr. Mason used Rubicon client funds to invest in Orchard Park, an entity allegedly formed and controlled by Mr. Mason, and that all such invested funds were subsequently withdrawn from Orchard Park by the Masons and were used for their own, extensive personal expenses. The Company is also aware of at least two other cases filed in other jurisdictions against Rubicon and/or the Masons and Orchard Park, and there may be additional cases filed against Rubicon and/or the Masons of which the Company is unaware. On January 17, 2025, the SEC charged Mason, Rubicon, and Orchard Park with violating Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, and Mason and Rubicon with violating Sections 206(1) and (2) of the Investment Advisers Act of 1940 in connection with the Allegations, and the U.S. Attorney’s Office for the Eastern District of Pennsylvania announced criminal charges against Mason. Mason, Rubicon and Orchard Park have consented to the entry of final judgments in the SEC matter, subject to court approval. On January 28, 2025, Mason pled guilty to nine criminal charges, including wire fraud, securities fraud, investment advisor fraud and filing false tax returns.

As of February 11, 2025, eight separate, but related, suits have been filed against SPTC in its capacity as custodian for the Rubicon accounts of the plaintiffs. These actions were also filed in the Court of Common Pleas of Montgomery County, Pennsylvania and are: Star Sitron vs. SEI Private Trust Company, Case No. 2024-17132 (Sitron); Charles Murray vs. SEI Private Trust Company, Case No. 2024-18391 (Murray); James A. Byrne & Sharon Byrne vs. SEI Private Trust Company, Case No. 2024-20612; Melody Pettinelli & Melody Pettinelli as Trustee of the Donald Pettinelli Trust dated 11/7/1996 vs. SEI Private Trust Company, Case. 2024-21377; Norman Love vs. SEI Private Trust Company, Case No. 2024-21361; Stephen Red & Carla Red vs. SEI Private Trust Company, Case No. 2024-21902; Edward A. Tettemer & Lyn K. Tettemer vs. SEI Private Trust Company, Case No. 2024-21827; and Jonathan Klein & Sara Klein vs. SEI Private Trust Company, Case No. 2024- 23294 (collectively, the Rubicon Actions). Based on the complaints that have thus far been filed in the Rubicon Actions, these actions appear to be based generally on similar theories that include alleged breach of contract, breach of fiduciary duty, negligence, and breach of state consumer protection laws by SPTC in connection with certain transfers of Plaintiffs’ assets from SPTC custodial accounts to Orchard Park bank accounts. SPTC has been served with complaints in two of the Rubicon Actions, Sitron and Murray. In the remaining six Rubicon Actions, the plaintiffs have commenced suit but have not filed their formal complaints. The Sitron and Murray cases are both in the early stages, with initial motion practice and discovery now occurring.

On August 8, 2024, SPTC filed preliminary objections to the plaintiff’s complaint in Sitron, which remain pending. On September 12, 2024 the Sitron court issued an initial case management order requiring, among other things, fact discovery to be completed within approximately 18 months and dispositive motions to be filed within 21 months from the commencement of the action. On October 7, 2024, the Murray court issued an initial case management order requiring, among other things, fact discovery to be completed within 9 months and dispositive motions to be filed within 12 months of commencement of the action. On October 16, 2024, SPTC filed preliminary objections to the plaintiff's claims in Murray. On December 13, 2024, the Murray court denied each of SPTC’s preliminary objections. On January 16, 2025, SPTC filed its Answer with New Matter to the Murray complaint and on February 5, 2025, SPTC joined Rubicon, Mason and Orchard Park as additional defendants in the Murray litigation.

While the Rubicon Actions are in their infancy and the ultimate outcomes of these litigations remain uncertain, SEI and SPTC intend to defend each of the Rubicon Actions. Currently, SPTC estimates that the aggregate amount of Rubicon client assets transferred at the direction of Mr. Mason from SPTC custodial accounts to Orchard Park bank accounts is approximately $15,000. In the event that SPTC is unsuccessful in its defense of the Rubicon Actions, SEI does not

currently believe that the losses associated with such unsuccessful defense would exceed the approximately $15,000 of Rubicon client assets that Mr. Mason directed to be transferred to Orchard Park.

United Kingdom Financial Conduct Authority Supervisory Review of SEI Investments (Europe) Limited

On July 31, 2024, SEI Investments (Europe) Limited (SIEL), an indirectly, wholly-owned operating subsidiary of SEI, received a final requirement notice from the Financial Conduct Authority of the United Kingdom (the FCA) under section 166(3)(a) of the Financial Services and Markets Act 2000 (FSMA), requiring SIEL to engage a “Skilled Person” to undertake a two-stage review of SIEL’s governance arrangements and control environment. In the first stage, the Skilled Person will provide SIEL and the FCA with a report setting out the Skilled Person’s view of the effectiveness of the control environment and governance arrangements with respect to key risks, as well as the Skilled Person’s recommendations where necessary to address any identified weaknesses (the Section 166 Report). In the second stage, the Skilled Person will provide an independent view of the quality and completeness of the remediation carried out by SIEL to address any findings from the initial stage and any self-identified weaknesses, including a view on SIEL’s compliance with relevant regulations. The appointment of a Skilled Person is one of the regulatory tools used by the FCA to supervise and monitor firms it regulates. A Skilled Person is an independent third-party expert with the relevant knowledge and experience to undertake a review as described above. The FCA may use the Section 166 Report and any associated information or documents provided by the Skilled Person in connection with the exercise of any of its statutory functions including its supervisory and enforcement powers.

In August 2024, SIEL, with the approval of the FCA, appointed the firm of Grant Thornton to act as the Skilled Person.

On December 16, 2024, Grant Thornton delivered the first stage of its Skilled Person Report in which it concluded, in summary, that SIEL has an established corporate governance framework and risk management framework that it considered to be appropriate in design for the relative size and complexity of its activities. The Skilled Person Report did however make a number of recommendations for improvements in its governance arrangements with its U.S. parent, its three lines of defense, resourcing of its control functions, strategy and culture.

Following the provision of the first stage of the Skilled Person Report, SIEL continues to engage with the FCA as part of the exercise of its ongoing supervisory remit. This engagement is focused on determining the remediation actions that SIEL expects to be required, the parameters of the Skilled Person’s Stage 2 review and the potential requirement that SIEL obtain FCA consent to certain arrangements and/or new products or services while SIEL carries out the remediation activities.

SIEL is committed to implementing the necessary measures to meet the regulator’s expectations for a firm of its size and complexity that will enable SIEL to continue driving the growth of its U.K. business effectively. Until the matters currently under review with the FCA are finalized, neither SIEL nor SEI is reasonably able to provide an estimate of the costs or consequences that may be associated with any supervisory actions or the remediation activities in which SIEL is engaging.

Other Matters

The Company and certain of its subsidiaries are party to various other examinations, investigations, actions and claims arising in the normal course of business that the Company does not believe are material. The Company believes that the ultimate resolution of these matters will not have a material adverse effect on the Company's financial position or the manner in which the Company conducts its business. Currently, the Company does not believe the amount of losses associated with these matters can be estimated. While the Company does not believe that the amount of such losses will, when liquidated or estimable, be material to its financial position, the assumptions may be incorrect and any such loss could have a material adverse effect on the Company's results of operations or the manner in which the Company conducts its business in the period(s) during which the underlying matters are resolved.