Miai, Inc.

Allegations: IN FEBRUARY 2018, THE SECURITIES AND EXCHANGE COMMISSION ("SEC") ANNOUNCED THE CREATION OF A "SHARE CLASS SELECTION DISCLOSURE INITIATIVE" (THE "SCSD INITIATIVE"). THE SCSD INITIATIVE APPLIED TO INVESTMENT ADVISERS THAT SELECTED MUTUAL FUND SHARE CLASSES FOR CLIENTS, WHICH PAID THE ADVISER OR RELATED ENTITIES OR INDIVIDUALS A FEE PURSUANT TO RULE 12B-1 OF THE INVESTMENT COMPANY ACT OF 1940 ("12B-1" FEE) WHEN A LOWER-COST SHARE CLASS FOR THE SAME FUND WAS AVAILABLE TO CLIENTS.DURING THE PERIOD IN QUESTION, MIAI INCLUDED DISCLOSURE ON ITS RECEIPT OF 12B-1 FEES IN ITS FORM ADV AND INVESTMENT ADVISORY AGREEMENTS.AS PART OF THE SCSD INITIATIVE, THE SEC ASKED INVESTMENT ADVISORY FIRMS TO VOLUNTARILY REVIEW THEIR DISCLOSURES DATING BACK TO 2014 AND REFUND TO INVESTORS 12B-1 FEES WHEN, IN THE SEC'S VIEW, THE FIRM DID NOT FULLY DISCLOSE CONFLICTS OF INTEREST ABOUT THESE FEES. GIVEN THE SEC'S UPDATED GUIDANCE ON 12B-1 FEES, MIAI DETERMINED THAT OUR DISCLOSURE DID NOT MATCH THE SEC'S POSITION. MIAI, ON JANUARY 30, 2019, VOLUNTARILY CONSENTED TO A STANDARD ORDER INSTITUTING ADMINISTRATIVE AND CEASE-AND-DESIST PROCEEDINGS ("ORDER") THAT ALL PARTICIPANTS IN THE SCSD INITIATIVE HAD TO ACCEPT. Status: Final Sanction Detail: WITHOUT ADMITTING OR DENYING THE SEC'S FINDINGS, MIAI CONSENTED TO A CENSURE AND CEASE-AND-DESIST FROM COMMITTING OR CAUSING ANY FUTURE VIOLATIONS OF SECTION 206(2) AND SECTION 207 OF THE INVESTMENT ADVISERS ACT OF 1940. MIAI AGREED TO REIMBURSE TO ITS CLIENTS $455,647.25 IN 12B-1 FEES AND PAY $32,932.21 IN PREJUDGMENT INTEREST. CONSISTENT WITH THE TERMS OF THE SCSD INITIATIVE, THE SEC AGREED NOT TO IMPOSE PENALTIES AGAINST MIAI. Summary: TO ADDRESS THE UNDERTAKINGS IN THE ORDER, MIAI UPDATED ITS FORM ADV DISCLOSURES, IMPLEMENTED NEW POLICIES AND PROCEDURES RELATING TO MUTUAL FUND SHARE CLASS SELECTION, PROVIDED ADDITIONAL TRAINING TO INVESTMENT ADVISER REPRESENTATIVES ON SHARE CLASS SELECTION, AND MOVED EXISTING ADVISORY CLIENTS INTO LOWER COST SHARE CLASSES WHERE WARRANTED. MIAI WILL DISBURSE ALL AMOUNTS PAYABLE TO AFFECTED INVESTORS WITHIN 90 DAYS OF THE DATE THE COMMISSION STAFF ACCEPTS THE PAYMENT CALCULATION.