SEC’s Pursuit of Mutual Fund Share Class Violations Continues Unabated

Consistent with its oft-repeated goal of protecting retail investors, the SEC recently settled three enforcement actions against investment advisers who allegedly failed to make adequate disclosures concerning their conflicts of interest in selecting mutual fund share classes for clients, failed to achieve best execution for those clients and made material misstatements in public filings concerning those practices. This article analyzes the alleged violations and the settlement order against each of the three advisers. For other recent enforcement actions involving mutual fund share class recommendations, see “SEC Continues to Pursue Advisers That Provide Inadequate Disclosures About Mutual Fund Share Class Selection Practices and Other Conflicts of Interest” (Nov. 15, 2018); “SEC Continues to Pursue Advisers That Fail to Make Adequate Disclosures About Selection of Mutual Fund Share Classes” (Oct. 4, 2018); and “SEC Settles Three Additional Enforcement Actions for Inadequate Share-Class Disclosures” (May 17, 2018).

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