SEC charges Bolton Securities with failing to disclose 12b-1 fee conflicts

The Securities and Exchange Commission has charged Bolton Securities, a Bolton, Mass.-based registered investment adviser and broker-dealer doing business as Bolton Global Asset Management, with failing to disclose material conflicts of interest related to 12b-1 fees. According to the SEC's complaint, Bolton invested advisory clients in mutual fund share classes that charged 12b-1 fees, and which had an available share class without 12b-1 fees. From August 2014 through at least the end of March 2018, those 12b-1 fees were paid to the firm's broker-dealer unit, which in turn paid some of the fees to Bolton Securities' investment adviser representatives. [Recommended video:​ Personalization and custom communications are key to the evolving client experience]​ In addition, the SEC alleges that from November 2014 through at least March 2019, Bolton Securities used the principal trading account of its broker-dealer unit to engage in self-dealing transactions with its advisory clients that generated principal trading compensation for the broker-dealer, without providing disclosure sufficient for clients to provide informed consent to the conflicted transactions, and without obtaining required client consent. The SEC said it is seeking disgorgement of ill-gotten gains, prejudgment interest, financial penalties and permanent injunctions against Bolton Securities.