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SEC: 'Scores' of RIAs investigated under share-class disclosure initiative

The SEC says that despite its initiative, 12b-1 disclosure failures “persist.”

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The SEC’s Division of Enforcement will recommend that those scores of firms that have self-disclosed violations of the 1940 Act will not be subject to civil penalties, but will be required to return investment losses that resulted in costlier fund recommendations to affected investors. (Photo: Diego Radzinschi/ALM)

The Security and Exchange Commission’s Share Class Selection Disclosure Initiative has brought the mutual fund recommendations of “scores” of RIAs under investigation, according to the agency’s FY 2018 Annual Report.

The SCSD Initiative launched in February and ended in June, and was designed to rein in “potential widespread violations” of the Investment Advisers Act of 1940.

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Nick Thornton

Nick Thornton

Nick Thornton is a financial writer covering retirement and health care issues for BenefitsPRO and ALM Media. He greatly enjoys learning from the vast minds in the legal, academic, advisory and money management communities when covering the retirement space. He's also written on international marketing trends, financial institution risk management, defense and energy issues, the restaurant industry in New York City, surfing, cigars, rum, travel, and fishing. When not writing, he's pushing into some land or water.

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