SEC Settles With 16 Additional Advisers Under SCSD Initiative, Severely Penalizes One That Did Not Self‑Report

In February 2018, the SEC announced its Share Class Selection Disclosure Initiative (SCSD Initiative), offering advisers that self-reported inadequate disclosure regarding selection of mutual fund share classes an opportunity to resolve SEC charges without paying a financial penalty. Earlier this year, the SEC announced settlements with 79 investment advisers, yielding restitution of more than $125 million to affected clients. The SEC recently announced an additional 16 settlements under the SCSD Initiative, yielding an additional $9.86 million in disgorgement and interest for affected investors. This article details the terms of the recent settlements and an additional SEC order that imposed a significant penalty, in addition to disgorgement and interest, on an adviser that did not self-report under the SCSD Initiative. See “SEC Settles With 79 Investment Advisers Under Its Share Class Selection Disclosure Initiative” (Apr. 4, 2019).

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