SEC Share Class Selection Disclosure Initiative Ends With Three Settlements

Three investment advisers settled separate charges with the SEC (see here, here and here) after self-reporting certain failures to disclose conflicts of interest that were the focus of the SEC Enforcement Division's ("Division") Share Class Selection Disclosure Initiative. These settlements are the final cases the SEC will bring under the initiative.

As previously covered, the Division launched the initiative to incentivize self-reporting of certain mutual fund share class selection issues and allow advisory clients to obtain repayment of overcharges.

According to the SEC, two of the investment advisers self-reported the violations under the initiative and the third investment adviser self-reported its violations "within months" of the initiative's deadline. The SEC found that the investment advisers violated fiduciary duty and disclosure requirements by: