June 03, 2021

Jim Lundy Discusses Potential SEC 12b-1 Cases With ThinkAdvisor

In the article “Dually Registered Firm Must Pay SEC $1.2M Over 12b-1 Fees,” ThinkAdvisor turned to SEC and regulatory enforcement defense partner Jim Lundy for insight on 12b-1 cases in the Securities and Exchange Commission’s (SEC) pipeline.

According to the SEC, 12b-1 fees are fees paid out of mutual fund or exchange-traded fund assets to cover the costs of distribution — marketing and selling mutual fund shares — and sometimes to cover the costs of providing shareholder services.

Lundy told ThinkAdvisor, “It is not a surprise that there are still some cases in the SEC’s pipeline that are and will be instituted” regarding the Share Class Selection Disclosure (SCSD) Initiative, which ended last April.

“There will likely also be cases issued regarding the various revenue-sharing sweep-like investigations that were opened toward the end of the SCSD Initiative,” Lundy said.

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