The Securities and Exchange Commission has settled charges with 79 investment advisory firms under its share-class disclosure initiative, which was launched just over a year ago.

More than $125 million will be returned to investors from the settlements, which includes earnings from improper or undisclosed fees and interest on the earnings. Under the terms of the program, the SEC will not impose penalties against the self-reporting firms.

Under the SCDI, registered advisers were allowed to self-report violations of the Investment Advisers Act of 1940 within a four-month period.

The program keyed on what the SEC called “potential widespread violations” relating to the disclosure of 12b-1 fees on mutual funds sold to retail investors, and recommendations of higher cost share classes when lower-cost shares of the same funds were available.

In a press release, the SEC said it continues to evaluate firms that self-reported prior to the June 12, 2018 deadline.

Steven Peikin, co-director of the SEC's division of enforcement, called the failure of fiduciaries to adequately disclose 12b-1 fees a “pervasive problem.”

“Most of the advisory clients harmed by the disclosure practices were retail investors, and in just a year's time, we made tremendous headway in putting money back into their hands while significantly improving the quality of firms' disclosures,” Peikin said in a statement.

The SEC has made proper disclosure of 12b-1 fees a priority for several years. In 2016, the Commission's Office of Compliance Inspections and Examinations issued a risk alert on share class disclosures and advised firms to reexamine internal policies.

“Despite the fiduciary duty imposed by the Advisers Act, an OCIE risk alert, Form ADV reminders, and numerous individual Commission enforcement actions, investment advisers were not adequately disclosing, or acting consistently with the disclosure regarding conflicts of interest related to their mutual fund share class selection practices,” the Commission said in its release.

The ill-gotten fees were paid to registered advisers in their capacity as broker-dealers or to broker-dealer affiliates, or directly to personal who are registered with the SEC, according to the Commission.

SEC Chairman Jay Clayton said the SCDI program is expected to improve disclosure practices throughout industry.

“I am pleased that so many investment advisers chose to participate in this initiative and, more importantly, that their clients will be reimbursed. This initiative will have immediate and lasting benefits for Main Street investors, including through improved disclosure,” Clayton said in a statement.

The firms have 30 days to notify affected clients. Under the terms of the settlements, the firms agree to being censured, but do not admit or deny the findings.

Among the 79 firms that self-reported and settled with the SEC, Wells Fargo agreed to pay out $17.3 million to clients; LPL $9.3 million; Raymond James $6.87 million; Stifel, Nicolaus and Co. $6.03 million; and Transamerica $6.02 million.

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SEC settles with 79 RIAs under share-class disclosure initiative

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