Kerry Zinn and Jackie Aleman Author Article "Enforcement Actions Taken for Non-Participation in the 2018 SCD Initiative"

March 5, 2019


Publication
Corporate Compliance Insights

Kerry A. Zinn
Jacqueline Aleman




In February 2018, the Division of Enforcement of the U.S. Securities and Exchange Commission (SEC) launched a self-reporting initiative for investment advisers who recommended, purchased or held mutual fund share classes with 12b-1 fees for their advisory clients when a lower-cost share class for the same fund was available and they did not adequately disclose the conflict of interest to clients relating thereto. As described below, the Division of Enforcement (“SEC Enforcement”) is investigating and bringing enforcement actions for breach of fiduciary and best execution duties against investment advisers who were eligible to self-report under the initiative but who did not do so.

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