Regulatory Outlook | 07.14.21
Kestra’s $10.3 Million Settlement is Proof Fund-fee Disclosure Remains a Priority at the SEC
Industry observers say a $10.3 million settlement last week with units of Kestra Financial shows the Securities and Exchange Commission (SEC) will continue to crack down on inadequate disclosure of mutual fund fees despite a change in leadership this year. The SEC made an enforcement priority of so-called share class selection during the tenure of former Chair Jay Clayton, under whom the agency conducted an initiative that zeroed in on financial firms that recommended high-fee funds to clients without telling them that lower-fee funds were available in the same share class. The program resulted in the return of $139 million to investors. The SEC has not taken its eye off the share-class ball since Chair Gary Gensler took over in April. The latest example is the July 8 settlement, in separate orders, with Kestra Advisory Services for $10 million and with Kestra Private Wealth Services for $299,569.
Read the full article on InvestmentNews.