Kestra Private Wealth Services, Llc

Allegations: THE COMMISSION FINDS THAT KESTRA PWS, A REGISTERED INVESTMENT ADVISER, BREACHED ITS FIDUCIARY DUTY TO ADVISORY CLIENTS BY FAILING TO PROVIDE FULL AND FAIR DISCLOSURE REGARDING TWO TYPES OF COMPENSATION PAID TO ITS PREDECESSOR FIRM AND AFFILIATED BROKER. FIRST, SINCE AT LEAST JANUARY 2014, THE AFFILIATED BROKER RECEIVED REVENUE SHARING PAYMENTS FROM AN UNAFFILIATED CLEARING BROKER ("CLEARING BROKER") AS ARESULT OF KESTRA PWS'S ADVISORY CLIENTS' INVESTMENTS IN CERTAIN MUTUAL FUNDS. CERTAIN OF THE MUTUAL FUNDS THAT PAID REVENUE SHARING WERE MORE EXPENSIVE THAN LOWER-COST OPTIONS AVAILABLE TO CLIENTS, INCLUDING INSTANCES WHEN THERE WERE LOWER-COST SHARE CLASSES OF THE SAME MUTUAL FUNDS AVAILABLE TO CLIENTS THAT DID NOT RESULT IN ANY REVENUE SHARING. SECOND, SINCE AT LEAST JANUARY 2014, THE AFFILIATED BROKER RECEIVED COMPENSATION RESULTING FROM TRANSACTION FEES CHARGED ON MUTUAL FUND TRADES AND NON-TRANSACTION FEES FOR CERTAIN SERVICES PROVIDED TO KESTRA PWS'S ADVISORY CLIENTS, WHICH WERE GREATER THAN THE AMOUNT CHARGED TO THE AFFILIATED BROKER BY THE CLEARING BROKER FOR THOSE TRADES AND SERVICES(COLLECTIVELY, "FEE MARKUPS"). KESTRA PWS ALSO BREACHED ITS DUTY TO SEEK BEST EXECUTION BY CAUSING CERTAIN ADVISORY CLIENTS TO INVEST IN SHARE CLASSES OF MUTUAL FUNDS THAT PAID REVENUESHARING WHEN SHARE CLASSES OF THE SAME FUNDS WERE AVAILABLE TO THE CLIENTS THAT PRESENTED AMORE FAVORABLE VALUE FOR THESE CLIENTS UNDER THE PARTICULAR CIRCUMSTANCES IN PLACE AT THETIME OF THE TRANSACTIONS. KESTRA PWS FAILED TO ADOPT AND IMPLEMENT WRITTENCOMPLIANCE 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, FEE MARKUP PRACTICES, AND BEST EXECUTION. Status: Final Sanction Detail: RESPONDENT SHALL CEASE AND DESIST FROM COMMITTING OR CAUSING ANY VIOLATIONS AND ANYFUTURE VIOLATIONS OF SECTIONS 206(2) AND 206(4) OF THE ADVISERS ACT AND RULE 206(4)-7PROMULGATED THEREUNDER; IS CENSURED; SHALL PAY DISGORGEMENT OF $208,187, PREJUDGMENTINTEREST OF $31,382, AND A CIVIL PENALTY OF $60,000; AND SHALL COMPLY WITH THEUNDERTAKINGS ENUMERATED IN THE ORDER. Summary: RESPONDENT HAS SUBMITTED AN OFFER OF SETTLEMENT, WHICH THE COMMISSION HAS DETERMINED TO ACCEPT. RESPONDENT WILLFULLY VIOLATED SECTIONS 206(2) AND 206(4) OF THE ADVISERS ACT AND RULE206(4)-7 THEREUNDER. ACCORDINGLY, IT IS ORDERED THAT RESPONDENT CEASE AND DESIST FROMCOMMITTING 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; IS CENSURED; SHALL PAYDISGORGEMENT OF $208,187, PREJUDGMENT INTEREST OF $31,382, AND A CIVIL PENALTY OF $60,000; AND SHALL COMPLY WITH THE UNDERTAKINGS ENUMERATED IN THE ORDER.

Allegations: THE SECURITIES AND EXCHANGE COMMISSION ("COMMISSION") DEEMS IT APPROPRIATE AND IN THE PUBLICINTEREST THAT PUBLIC ADMINISTRATIVE AND CEASE-AND-DESIST PROCEEDINGS BE, AND HEREBY ARE,INSTITUTED PURSUANT TO SECTIONS 203(E) AND 203(K) OF THE INVESTMENT ADVISERS ACT OF 1940("ADVISERS ACT") AGAINST KESTRA ADVISORY SERVICES, LLC ("KESTRA AS" OR "RESPONDENT"). THE COMMISSION FINDS THAT KESTRA AS, A REGISTERED INVESTMENT ADVISER, BREACHED ITS FIDUCIARY DUTY TO ADVISORY CLIENTS BY FAILING TO PROVIDE FULL AND FAIR DISCLOSURE REGARDING TWO TYPES OF COMPENSATION PAID TO ITS PREDECESSOR FIRM AND AFFILIATED BROKER. FIRST, SINCE AT LEAST JANUARY 2014, THE AFFILIATED BROKER RECEIVED REVENUE SHARING PAYMENTS FROM AN UNAFFILIATED CLEARING BROKER ("CLEARING BROKER") AS ARESULT OF KESTRA AS'S ADVISORY CLIENTS' INVESTMENTS IN CERTAIN MUTUAL FUNDS. CERTAIN OF THE MUTUAL FUNDS THAT PAID REVENUE SHARING WERE MORE EXPENSIVE THAN LOWER-COST OPTIONS AVAILABLE TO CLIENTS, INCLUDING INSTANCES WHEN THERE WERE LOWER-COST SHARE CLASSES OF THE SAME MUTUAL FUNDS AVAILABLE TO CLIENTS THAT DID NOT RESULT IN ANY REVENUE SHARING. SECOND, SINCE AT LEAST JANUARY 2014, THE AFFILIATED BROKER RECEIVED COMPENSATION RESULTING FROM TRANSACTION FEES CHARGED ON MUTUAL FUND TRADES AND NON-TRANSACTION FEES FOR CERTAINSERVICES PROVIDED TO KESTRA AS'S ADVISORY CLIENTS, WHICH WERE GREATER THAN THE AMOUNT CHARGED TO THE AFFILIATED BROKER BY THE CLEARING BROKER FOR THOSE TRADES AND SERVICES(COLLECTIVELY, "FEE MARKUPS"). KESTRA AS ALSO BREACHED ITS DUTY TO SEEK BEST EXECUTION BYCAUSING CERTAIN ADVISORY CLIENTS TO INVEST IN SHARE CLASSES OF MUTUAL FUNDS THAT PAID REVENUESHARING WHEN SHARE CLASSES OF THE SAME FUNDS WERE AVAILABLE TO THE CLIENTS THAT PRESENTED AMORE FAVORABLE VALUE FOR THESE CLIENTS UNDER THE PARTICULAR CIRCUMSTANCES IN PLACE AT THETIME OF THE TRANSACTIONS. KESTRA AS FAILED TO ADOPT AND IMPLEMENT WRITTENCOMPLIANCE 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, FEE MARKUP PRACTICES, AND BEST EXECUTION. Status: Final Sanction Detail: RESPONDENT SHALL CEASE AND DESIST FROM COMMITTING OR CAUSING ANY VIOLATIONS AND ANYFUTURE VIOLATIONS OF SECTIONS 206(2) AND 206(4) OF THE ADVISERS ACT AND RULE 206(4)-7PROMULGATED THEREUNDER; IS CENSURED; SHALL PAY DISGORGEMENT OF $7,229,802, PREJUDGMENTINTEREST OF $1,273,370, AND A CIVIL PENALTY OF $1,500,000; AND SHALL COMPLY WITH THEUNDERTAKINGS ENUMERATED IN THE ORDER. Summary: RESPONDENT HAS SUBMITTED AN OFFER OF SETTLEMENT, WHICH THE COMMISSION HAS DETERMINED TOACCEPT. RESPONDENT WILLFULLY VIOLATED SECTIONS 206(2) AND 206(4) OF THE ADVISERS ACT AND RULE 206(4)-7 THEREUNDER. ACCORDINGLY, IT IS ORDERED THAT RESPONDENT 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; IS CENSURED; SHALL PAYDISGORGEMENT OF $7,229,802, PREJUDGMENT INTEREST OF $1,273,370, AND A CIVIL PENALTY OF$1,500,000; AND SHALL COMPLY WITH THE UNDERTAKINGS ENUMERATED IN THE ORDER.

Allegations: ON JULY 11, 2016, KESTRA PWS AGREED TO PAY THE U.S. SECURITIES AND EXCHANGE COMMISSION AN ADMINISTRATIVE FINE OF $50,000 FOR FAILING TO DISCLOSE IN A TIMELY FASHION AN ALLEGED CONFLICT OF INTEREST ARISING FROM THE FIRM'S RECEIPT OF LOANS FROM A THIRD PARTY KESTRA PWS HAD ENGAGED TO PROVIDE BROKERAGE AND CUSTODIAL SERVICES TO ITS CLIENTS. Status: Final Sanction Detail: KESTRA PWS AGREED TO PAY A FINE OF $50,000 WITHIN 14 DAYS OF RESOLUTION DATE. Summary: WITHOUT ADMITTING OR DENYING THE UNDERLYING ALLEGATIONS, KESTRA PWS AGREED TO ACCEPT A CEASE AND DESIST ORDER, A CENSURE, AND PAY A FINE OF $50,000.

Allegations: THE RECOMMENDATION OF MUTUAL FUND SHARE CLASSES GENERATING COMPENSATION TO KESTRA PWS'S AFFILIATED BROKER-DEALER WITHOUT ADEQUATE DISCLOSURE OF SUCH COMPENSATION AND THE ADDITIONAL EXPENSES ASSOCIATED WITH THE SHARE CLASSES. Status: Final Sanction Detail: $502,703.66 IN DISGORGEMENT AND $46,299.36 IN INTEREST. Summary: WITHOUT ADMITTING OR DENYING THE UNDERLYING FINDINGS, KESTRA PWS OFFERED TO ACCEPT A CENSURE, AN ORDER TO CEASE AND DESIST FROM SUCH ACTIVITY, AND PAY ELIGIBLE CUSTOMERS AN ESTIMATED $502,703.66 IN DISGORGEMENT AND $46,299.36 IN INTEREST.