What You Need to Know
- Massachusetts BD Bolton Securities is the latest firm to get into hot water with the SEC over mutual fund 12b-1 fees.
- Sanctions against the firm include a $225,000 civil penalty.
- The securities violations occurred from August 2014 through at least March 2018, the SEC says.
Bolton, Massachusetts-based broker-dealer Bolton Securities has agreed to pay about $450,000 in disgorgement, interest and a civil penalty to settle allegations that it failed to disclose material conflicts of interest related to mutual fund 12b-1 fees and principal trading compensation generated from client investments, according to the Securities and Exchange Commission.
On Feb. 25, U.S. District Court for the District of Massachusetts entered a final consent judgment against Bolton Securities (Bolton Global Asset Management) in connection with the SEC’s allegations. The SEC had filed a complaint against the firm on Nov. 4, 2019, charging it with failing to disclose the material conflicts of interest.
Without admitting or denying the allegations of the SEC’s complaint, Bolton Securities consented to the entry of the final judgment enjoining it from violating Sections 206(2), 206(3), and 206(4) of the Investment Advisers Act and Rule 206(4)-7.
The company was also ordered to pay disgorgement of $190,000, prejudgment interest of $34,994 and a civil penalty of $225,000, according to the final judgment. The judgment provides that those monetary remedies will be distributed to harmed investors from a fair fund.