Signature Financial Services, Ltd

Allegations: SIGNATURE IS ALLEGED TO HAVE BREACHED OUR FIDUCIARY DUTY IN CONNECTION WITH OUR MUTUAL FUND SHARE CLASS SELECTION PRACTICES AND THE RECEIPT OF FEES PURSUANT TO RULE 12B-1 UNDER THE INVESTMENT COMPANY ACT OF 1940 BY OUR ASSOCIATED PERSONS, EACH OF WHOM ALSO WAS A REGISTERED REPRESENTATIVE OF AN UNAFFILIATED BROKER DEALER REGISTERED WITH THE COMMISSION. WE DID NOT ADEQUATELY DISCLOSE THIS CONFLICT OF INTEREST IN OUR FORMS ADV OR OTHERWISE. WE ALSO ALLEGEDLY BREACHED OUR DUTY TO SEEK BEST EXECUTION, 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. WE ALSO 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 OUR MUTUAL FUND SHARE CLASS SELECTION PRACTICES. Status: Final Sanction Detail: ADVISER PAID DISGORGEMENT OF $252,460.60 AND PREJUDGEMENT INTEREST OF $24,120.34 AND SHALL CEASE AND DESIST FROM COMMITTING OR CAUSING ANY VIOLATIONS AND ANY FUTURE VIOLATIONS OF SECTIONS 206(2) AND 206(4) OF THE ADVISERS ACT AND RULE 206(4)-7 PROMULGATED THEREUNDER. Summary: IN SEPTEMBER 2020, THE SEC ALLEGED THAT, FROM 2014-2019, WE FAILED TO ADEQUATELY DISCLOSE THE CONFLICT OF INTEREST ARISING FROM OUR SELECTION OF MUTUAL FUND SHARE CLASSES THAT CHARGED 12B-1 FEES. THESE FEES BENEFITTED US FINANCIALLY. THE ORDER ALSO ALLEGED THAT WE FAILED TO MAINTAIN POLICIES AND PROCEDURES ADEQUATE TO PREVENT THE VIOLATIONS. FINALLY, THE ORDER ALLEGED THAT WE VIOLATED THE ANTIFRAUD PROVISIONS OF SECTIONS 206(2) AND 206(4) OF THE INVESTMENT ADVISERS ACT OF 1940 AND RULE 206(4)-7.