Defendant Name: First Citizens Investor Services, Inc.

Defendant Type: Subsidiary of Public Company

Document Reference: 2019-28_3-19027

Document Details

Legal Case Name In the Matter of First Citizens Investor Services, Inc.
Document Name SEC Share Class Initiative Returning More Than $125 Million to Investors
Document Date 11-Mar-2019
Document Format Administrative Proceeding
File Number 3-19027
Allegation Type Investment Advisers/Investment Companies
Document Summary On March 11, 2019, the SEC "announced settled charges against 79 investment advisers who will return more than $125 million to clients, with a substantial majority of the funds going to retail investors. The actions stem from the SEC's Share Class Selection Disclosure Initiative , which the SEC's Division of Enforcement announced in February 2018 in an effort to identify and promptly correct ongoing harm in the sale of mutual fund shares by investment advisers. The initiative incentivized investment advisers to self-report violations of the Advisers Act resulting from undisclosed conflicts of interest, promptly compensate investors, and review and correct fee disclosures. The orders issued today address advisers who directly or indirectly received 12b-1 fees for investments selected for their clients without adequate disclosure, including disclosures that were inconsistent with the advisers' actual practices."

Disgorgement & Penalty Information

Cease and Desist Order
Undertakings: "Each adviser has also undertaken to review and correct allrelevant disclosure documents concerning mutual fund share class selection and 12b-1 fees and to evaluatewhether existing clients should be moved to an available lower-cost share class and move clients, as necessary."
Self Reporting to SEC
Monetary Penalties:


(Penalty was noted in document, but no amount was listed)

Pre-Judgment Interest

(Penalty was noted in document, but no amount was listed)

Related Documents:

IA-5124 11-Mar-2019 Administrative Proceeding
Order Instituting Administrative and Cease-and-Desist Proceedings, Pursuant to Sections 203(e) and 203(k) of the Investment Advisers Act of 1940, Making Findings, and Imposing Remedial Sanctions and a Cease-and-Desist Order
The Commission stated: "These proceedings arise out of breaches of fiduciary duty and inadequate disclosures by registered investment adviser First Citizens Investor Services, Inc. in connection with its mutual fund share class selection practices and the fees it and its associated persons received pursuant to Rule 12b-1 under the Investment Company Act of 1940 ("12b-1 fees")."