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Compliance and Regulatory Alerts  |  05-02-19

SEC Enforcement Investigating Firms That Did Not Self-Report

The SEC's Enforcement Division has now initiated investigations against firms that did not self-report by the deadline of the SEC’s Share Class Selection Disclosure Initiative. (See Bates Alert for background on the Initiative.)

As recently reported, enforcement actions for firms that did not self-report are expected to have a “broader focus than the initiative,” focusing on “compensation that can cause conflicts of interest” including “revenue-sharing payments.”

Our Support Of Your Firm

Bates stands ready to support firms in their Share Class-related enforcement matters. Bates has deep, proven experience and expertise in share class analysis, covering disclosures, compensation and conflicts of interest.

Recently, on behalf of over sixteen major national and regional financial institutions, Bates provided important assistance to firms and their counsel participating in the SEC’s Share Class Selection Disclosure Initiative and related SEC Examinations, as well as to firms addressing  FINRA’s recent 529 Share Class Initiative. As a result, those companies have saved thousands of dollars in remediation costs and avoided reputational harm.

Bates Group helps firms review their policies and procedures for share class selection, disclosures and compensation practices. We perform data analysis, identifying an appropriate methodology to narrow the focus to only adversely impacted accounts, performing calculations and providing remediation and interest figures for use with regulators. Bates also helps firms review current supervisory and compliance practices to ensure they are properly designed to identify and mitigate these conflicts. Most importantly, after consultation with counsel, we provide reporting that can be used directly with the SEC.

Contact US

Whether you are facing an enforcement or remediation effort, please contact us to discuss how we can help you to address your share class-related needs.

email: phone: 971-250-4353

David Birnbaum, Managing Director

email: phone: 917-273-2682