Bnb Wealth Management, Llc

Allegations: BREACHES OF FIDUCIARY DUTY IN CONNECTION WITH MUTUAL FUND SHARE CLASS SELECTION PRACTICES BY FAILING TO ADEQUATELY DISCLOSE THIS CONFLICT OF INTEREST. Status: Final Sanction Detail: DISGORGEMENT OF $42,757 AND PREJUDGMENT INTEREST OF $6,660 AND A CIVIL MONEY PENALTY IN THE AMOUNT OF $25,000. PAID IN JULY OF 2020, NO PORTION WAIVED. Summary: ON JULY 09, 2020, BNB WEALTH MANAGEMENT, LLC WITHOUT ADMITTING OR DENYING ANY FINDINGS, CONSENTED TO THE ENTRY OF AN ORDER INSTITUTING ADMINISTRATIVE AND CEASE-AND-DESIST PROCEEDINGS, PURSUANT TO SECTIONS 203(E) AND 203(K) OF THE INVESTMENT ADVISERS ACT OF 1940, IN CONNECTION WITH ITS MUTUAL FUND SHARE CLASS SELECTION PRACTICES. THE ORDER WAS LIMITED TO NEW CLIENTS WHO RETAINED THE SERVICES OF BNB BETWEEN MARCH 2014 AND DECEMBER 31, 2016. PROCEEDINGS AROSE OUT OF BREACHES OF FIDUCIARY DUTY BY BNB WEALTH MANAGEMENT, LLC, A REGISTERED INVESTMENT ADVISER, IN CONNECTION WITH ITS MUTUAL FUND SHARE CLASS SELECTION PRACTICES. AT TIMES DURING THE PERIOD FROM MARCH 2014 THROUGH DECEMBER 2018 (THE "RELEVANT PERIOD"), BNB PURCHASED, RECOMMENDED, OR HELD FOR CERTAIN ADVISORY CLIENTS MUTUAL FUND SHARE CLASSES THAT CHARGED FEES PURSUANT TO RULE 12B-1 UNDER THE INVESTMENT COMPANY ACT OF 1940 ("12B-1 FEES") INSTEAD OF LOWER-COST SHARE CLASSES OF THE SAME FUNDS THAT WERE AVAILABLE TO THE CLIENTS. BNB'S INVESTMENT ADVISER REPRESENTATIVES ("IARS"), IN THEIR CAPACITIES AS REGISTERED REPRESENTATIVES OF AN UNAFFILIATED BROKER-DEALER, RECEIVED 12B-1 FEE REVENUE IN CONNECTION WITH THESE INVESTMENTS, BUT BNB DID NOT ADEQUATELY DISCLOSE THIS CONFLICT OF INTEREST IN ITS FORMS ADV OR OTHERWISE. BNB ALSO BREACHED ITS DUTY TO SEEK BEST EXECUTION FOR CERTAIN TRANSACTIONS BY CAUSING CERTAIN ADVISORY CLIENTS TO INVEST IN FUND SHARE CLASSES THAT CHARGED 12B-1 FEES WHEN SHARE CLASSES OF THE SAME FUNDS THAT PRESENTED A MORE FAVORABLE VALUE FOR THESE CLIENTS UNDER THE PARTICULAR CIRCUMSTANCES IN PLACE AT THE TIME OF THE TRANSACTIONS WERE AVAILABLE TO THE CLIENTS. FURTHERMORE, BNB FAILED TO ADOPT AND IMPLEMENT WRITTEN COMPLIANCE POLICIES AND PROCEDURES REASONABLY DESIGNED TO PREVENT VIOLATIONS OF THE ADVISERS ACT AND THE RULES THEREUNDER IN CONNECTION WITH ITS MUTUAL FUND SHARE CLASS SELECTION PRACTICES.