Three Investment Advisers Settle Share Class Selection Disclosure Violations

Three unrelated investment advisers agreed to settle SEC charges of violating fiduciary duties to customers due to improper mutual fund share class selection practices.

According to the SEC, PNC Investments LLC ("PNCI"), Securities America Advisors, Inc. ("SAA"), and Geneos Wealth Management, Inc. ("Geneos") (collectively, the "Advisers") invested client assets in mutual fund share classes with 12b-1 fees (which are generally paid by a mutual fund for marketing and distribution services), despite the availability of less expensive share classes of the same funds. In addition to violating their obligations to seek the best execution for clients, the SEC alleged that the Advisers each received payments in connection with the fees, but failed to disclose the conflicts of interest to investors. The SEC also claimed that the Advisers had inadequate policies and procedures in place to prevent violations of the Advisers Act.