Commonwealth Monetary Community nonetheless could should pay as a lot as $111.5 million in damages tied to an almost five-year-old Securities and Change Fee criticism it’s combating, though the funding advisor expects to e-book not more than a $24 million loss.

The SEC sued Commonwealth in 2019, alleging that from not less than July 2014 by December 2018, the corporate breached its fiduciary obligation to its advisory shoppers by failing to reveal conflicts of curiosity in a revenue-sharing program with its clearing agency.

Particularly, Commonwealth failed to inform shoppers that some mutual fund share courses generated thousands and thousands of {dollars} in revenue-sharing funds for the agency, whereas different, cheaper share courses would have generated a lot much less, or no, extra income, the SEC contended within the criticism in U.S. District Courtroom in Massachusetts.

The criticism additionally alleged that Commonwealth did not undertake and implement written insurance policies and procedures moderately designed to establish and to make sure the disclosure of fabric conflicts of curiosity arising from its income sharing settlement, Commonwealth famous in a report filed with the SEC final month.

Commonwealth doesn’t touch upon pending authorized issues as an organization coverage, Peggy Ho, senior vice chairman, normal counsel and chief threat officer, advised ThinkAdvisor Friday in an e mail.

In April 2023, the district courtroom issued a abstract judgment discovering that Commonwealth violated the Advisers Act of 1940 by failing to totally disclose conflicts of curiosity from income sharing it obtained with respect to sure mutual fund share courses, and by failing to implement written insurance policies and procedures to reveal the income sharing compensation, the submitting stated.