Continuing its crackdown on 12b-1 fees, the Securities and Exchange Commission on Monday announced settled charges against 17 investment advisors for disclosure failures regarding their mutual fund share-class selection practices, bringing the total amount ordered to more than $135 million.
The firms include 16 advisors that self-reported as part of the Division of Enforcement’s Share Class Selection Disclosure Initiative and one advisor that did not self-report and was ordered to pay a $300,000 civil penalty.
On March 11, the commission instituted actions against 79 advisors that participated in the initiative, ordering the payment of over $125 million in disgorgement and prejudgment interest to investors.
The commission did not order a civil penalty as to any of those self-reporting firms.
The agency also charged Mid Atlantic Financial Management Inc., on Monday. The firm was eligible to self-report as part of the initiative but did not.
Mid Atlantic, whose affiliate received 12b-1 fees, failed to fully disclose the conflicts arising from its selection of more expensive mutual fund share classes for clients when lower-cost share classes for the same fund were available.