SEC Orders Three Self-Reporting Advisory Firms to Reimburse Investors

April 17th | 2020

Today the SEC announced more settlements pursuant to its 2018 initiative that allowed advisers who self-reported certain conflict of interest disclosure violations to be eligible for standard settlement terms that did not include the imposition of a civil penalty. The initiative focused on where advisers had not fully disclosed their conflicts of interests in selecting more expensive mutual fund share classes that paid 12b-1 fees for their clients when lower-cost share classes were available.

From March 11, 2019 through September 30, 2019, the Commission issued orders against 95 advisers that chose to participate in the initiative. Including today’s actions, the Commission has ordered more than $139 million to be returned to investors as part of the initiative. The SEC’s orders today are the final cases the agency intends to recommend under the terms of the initiative.

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