SEC Share Class Initiative Returning More Than $125 Million to Investors
Most RIA’s have already taken care of their firm in this area, however if your firm needs guidance on this rule, I’ve attached the link to the full SEC press release from March 2019 here and a small excerpt is below. If your firm happens to need guidance in this area, I’ve performed the extensive analysis and helped with the share conversion project for a couple large Hybrid RIA’s. Contact me if you can use assistance or general guidance.
Cheers from Sonja Rae @ RIA-CCO ~
In March 2019, The SEC settled charges against 79 investment advisers who will return more than $125 million to clients, with a substantial majority of the funds going to retail investors. The actions stem from the SEC’s Share Class Selection Disclosure Initiative, which the SEC’s Division of Enforcement announced in February 2018 in an effort to identify and promptly correct ongoing harm in the sale of mutual fund shares by investment advisers. The initiative incentivized investment advisers to self-report violations of the Advisers Act resulting from undisclosed conflicts of interest, promptly compensate investors, and review and correct fee disclosures. The orders issued address advisers who directly or indirectly received 12b-1 fees for investments selected for their clients without adequate disclosure, including disclosures that were inconsistent with the advisers’ actual practices.
