Action against Defendant, a registered investment adviser and broker-dealer, for alleged failure to disclose conflicts of interest. According to the SEC, Defendant invested and held clients in mutual fund share classes that charged 12b-1 fees, even when it knew these clients were eligible to invest in lower-cost shares of the same funds. The SEC alleges that Defendant also participated in a program offered by its clearing broker to share revenues and service fees it received from certain mutual funds, giving Defendant an incentive to favor mutual funds in the program. The SEC further alleges that Defendant directed its clearing broker to mark up certain fees charged to Defendant’s advisory clients, which Defendant then received indirectly from those clients.

SEC Complaint 

SEC Litigation Release