SEC Orders Three Self-Reporting Advisory Firms to Reimburse Investors

The Securities and Exchange Commission today announced settled charges against two advisers that self-reported as part of the Division of Enforcement’s Share Class Selection Disclosure Initiative, and a third adviser that self-reported within months of the initiative’s self-reporting deadline. The Commission’s orders today are the final cases the Division intends to recommend under the terms of 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 voluntary initiative announced by the Division of Enforcement on February 12, 2018, provided advisers an opportunity to self-report that they had failed to fully and fairly disclose their conflicts of interests in selecting for their advisory clients more expensive mutual fund share classes that paid 12b-1 fees when lower-cost share classes were available for the clients and be eligible for standard settlement terms that did not include the imposition of a civil penalty.