Advisory Firm Settles Charges of Defrauding Investors, Agrees to Refund Allegedly Ill-Gotten Gains to Harmed Clients

The Securities and Exchange Commission today announced that SCF Investment Advisors, Inc. (SCF) has agreed to settle charges that it selected mutual funds and cash sweep money market funds for clients that provided undisclosed revenue to the firm’s affiliated broker-dealer and were more expensive than other available options for the same funds. The settlement includes a distribution of money to harmed clients of the Fresno, California-based investment advisory firm. According to the SEC’s order, SCF engaged in several practices that violated its fiduciary duty to its clients. First, the order finds that SCF purchased, recommended, or held certain mutual fund share classes for its advisory clients that charged 12b-1 fees, which were received by SCF’s affiliated broker-dealer, SCF Securities, Inc.