Defendant Name: First Citizens Investor Services, Inc.

Defendant Type: Subsidiary of Public Company
Public Company Parent: First Citizens BancShares, Inc. 
SIC Code: 6020
CUSIP: 31946M10

Document Reference: IA-5124

Document Details

Legal Case Name In the Matter of First Citizens Investor Services, Inc.
Document Name 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
Document Date 11-Mar-2019
Document Format Administrative Proceeding
File Number 3-19027
Allegation Type Investment Advisers/Investment Companies
Document Summary 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")."

Disgorgement & Penalty Information

Cease and Desist Order
Other Compliance Related Undertaking
"Respondent shall deposit the full amount of the disgorgement and prejudgment interest (the “Distribution Fund”) into an escrow account [...] Respondent shall be responsible for administering the Distribution Fund"
Self Reporting to SEC
Monetary Penalties:


Individual:     $359,872.11 Shared:    

Pre-Judgment Interest

Individual:     $42,793.07 Shared:    

Total Penalty

Individual:     $402,665.18 Shared:    

Related Documents:

2019-28_3-19027 11-Mar-2019 Press Release--Administrative Proceeding
SEC Share Class Initiative Returning More Than $125 Million to Investors
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."