Regulatory Outlook | 09.15.21
SEC Continues to Smack Firms Over Conflicts Around Fund Fees
The SEC is continuing to punish broker-dealers and related registered investment advisors for failing to fully disclose conflicts related to fund sales, and recently reached a $2.1 million settlement with MML Investors Services and a $2.47 million settlement with Rothschild Investment Corp. In the first instance, MML and a related firm had since March 2015 invested clients in certain share classes of mutual funds in which they gained revenue-sharing payments tied to agreements with their clearing broker, yet "provided no disclosure or inadequate disclosure of the conflicts of interest arising from this compensation," according to the SEC. Meanwhile, Rothschild since January 2014 had not been fully disclosing fees, revenue-sharing payments, and the related conflicts of interest, including 12b-1 fees and revenue sharing, from a clearing broker.
Read the full article on InvestmentNews.