12b-1 Fees

SEC Will Not Fine Advisers that Self-Report Share Class Violations by June 12

Its a limited time offer. The SECs Division of Enforcement will not impose financial penalties against advisory firms that voluntarily report placing clients in certain share classes when less expensive share classes for the same investment are available. Advisers taking advantage of this offer will still have to pay disgorgement and prejudgment interest, be censured and face the possibility of individual liability.

SEC Catches a Big Fish in Its 12b-1 Fee Dragnet

The SEC shows no sign of letting up in its scrutiny of investment advisory firms that place clients in more expensive share classes when less expensive class shares of the same securities are available. It reached a settlement with a small, financially troubled adviser last month, and early this month settled charges with a large financial institution, Credit Suisse, and one of its investment adviser representatives.

No Disgorgement or Fines for Adviser in 12b-1 Fee Settlement

It was just nine months ago that the SEC issued a risk alert saying it would be looking hard at advisory firms that failed to disclose when placing clients in mutual fund share classes that are more expensive than others - and only three weeks later charged an adviser for doing just that. On March 29, however, that firm, in a settlement with the agency, walked away without having to provide disgorgement or pay any fines.

12b-1 Fee and Reverse Churning Allegations Dominate SEC Case against Advisers

Allegations involving multiple SEC red flags came together this month when the agency reached a settlement with three AIG Advisor Group subsidiaries. The areas of SEC interest include placement of clients in funds with 12b-1 fees when less expensive funds are available, dually registered advisers involved in reverse churning, and advisers that fail to follow through on examination deficiencies.

SEC Alleges Conflict of Interest In Adviser Favoring 12b-1 Funds Over Others

Theres nothing wrong with putting clients into funds that charge fees for distribution - as long as you first let your clients know of any other funds you manage that do not charge such fees. Its also probably best to if your firm didnt receive those distribution fees.

Distribution Fees: New Mutual Fund Guidance Clarifies Board and Adviser Roles

Its the job of a mutual funds board of directors to police how shares are sold, and its the job of the funds adviser to provide the board with sufficient information to make that determination. That is the essence of the guidance update, "Mutual Fund Distribution and Sub-Accounting Fees," issued January 6 by the SECs Division of Investment Management.

Distribution Fees: Dont Disguise Them as Something Else

The SEC doesnt like it when funds and advisers say they are paying for one kind of service when they actually are paying for another. Payments for sales of mutual fund shares are a case in point.

SEC Chairman Describes SECs Fund-Related Initiatives

In her May 4 address before the Mutual Fund Directors Forum conference in Washington, D.C., SEC Chairman Mary Schapiro provided updates on a number of SEC rulemaking initiatives under the Investment Company Act:

No 12b-1 Reform This Year

The SEC has shelved its plan to overhaul Rule 12b-1. At least for this year

Audio Interviews

Most Important Supreme Court Decisions for Advisers and Funds

Find out the high court decisions from recent years that are likely to affect how advisers and investment companies work from Debevoise partner Robert Kaplan. 

Watch Out for 5 Cybersecurity Myths

ACA Aponix Director Pascal Busnel on the most common cybersecurity myths that may cause firms to spend resources where they may not be needed.

Top Marketing Problems … and Solutions

Get solutions for the top marketing challenges that advisers face from ACA Compliance Group managing director Kimberly Daly

The Hidden Costs of Non-Compliance

Proskauer law firm partner and former SEC Division of Investment Management deputy director Robert Plaze on why the costs of non-compliance go way beyond an SEC penalty.

CCO Liability: How to Protect Yourself

Find out from Blue Edge Capital CCO Margaret Fretz what chief compliance officers may be liable for and best practices to make sure you are protected.

Ethics or Compliance: Making the Choice

Find out the difference an ethics, rather than a compliance, perspective makes at an advisory firm from former Ethics and Compliance Officer Association COO Timothy Mazur.

Top 10 Cybersecurity Steps to Take Now

Sutherland law firm partner Brian Rubin shares the most urgent cybersecurity steps for investment advisers.

How to Read an SEC Enforcement Action

Stern Tannenbaum law firm partner Aegis Frumento on how to get the most from reading an SEC administrative order or court complaint.