By Andrew Ramonas
The SEC likely will bring more enforcement actions against investment firms that pushed mutual funds with higher fees on clients who had cheaper options, a senior agency official said.
The Securities and Exchange Commission’s Share Class Selection Disclosure Initiative has been “phenomenally successful” since it launched in 2018, Steven Peikin, a co-director of the agency’s Enforcement Division, said June 25.
The SEC shouldn’t use settlements and guidance to justify its enforcement actions, Republican former SEC Commissioner Paul Atkins said in an email.
“This initiative is the embodiment of regulation by enforcement,” said Atkins, now CEO of consulting firm Patomak Global Partners LLC in Washington. “Worse is that the settlements are then used to make new law without giving firms notification or opportunity to comment on new requirements, as required by law.”
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