Capital Analysts, Llc

Allegations: THE SEC ALLEGED THAT FROM 4/2013 - 3/2016, CAPITAL ANALYSTS DID NOT ADEQUATELY DISCLOSE THAT IT HAD A CONFLICT OF INTEREST WHEN IT INVESTED CAAMS WRAP FEE CLIENTS IN MUTUAL FUND SHARE CLASSES THAT PAID 12B-1 FEES TO ITS AFFILIATED BROKER-DEALER, LINCOLN INVESTMENT PLANNING, LLC ("LINCOLN INVESTMENT") WHEN A LOWER-COST SHARE CLASS OF THE SAME FUND WITHOUT A 12B-1 FEE WAS AVAILABLE. THE SEC ALSO ALLEGED THAT CAPITAL ANALYSTS DID NOT MEET ITS DUTY OF BEST EXECUTION, FAILED TO ADOPT AND IMPLEMENT WRITTEN POLICIES AND PROCEDURES REASONABLY DESIGNED TO ADDRESS MUTUAL FUND SHARE CLASS SELECTION AND RELATED CONFLICTS OF INTEREST AND, FROM 4/13 - 3/2017, DID NOT ADEQUATELY DISCLOSE REVENUE SHARING RECEIVED BY LINCOLN INVESTMENT FROM IT'S CLEARING FIRM. AS A RESULT, THE SEC ALLEGED THAT CAPITAL ANALYSTS VIOLATED SECTIONS 206(2) AND 206(4) OF THE INVESTMENT ADVISERS ACT OF 1940 AND RULE 206(4)-7 THEREUNDER. ON SEPEMBER 14, 2018, THE SEC ACCEPTED CAPITAL ANALYSTS OFFER OF SETTLEMENT AND ISSUED AN ORDER INSTITUTING ADMINISTRATIVE AND CEASE-AND-DESIST PROCEEDINGS, DISGORGEMENT AND PAYMENT OF A PENALTY. THE FIRM NEITHER ADMITTED NOR DENIED THE SEC'S FINDINGS IN AGREEING TO ENTER THE SETTLEMENT. Status: Final Sanction Detail: A TOTAL AMOUNT OF $2,120,349, REPRESENTING DISGORGED FEES AND PREJUDGEMENT INTEREST OF 1,820,349 AND A CIVIL PENALTY OF $300,000. ON 9/18/18, CAPITAL ANALYSTS PAID THE CIVIL PENALTY OF $300,000 AND $770,476 OF DISGORGED FEES AND INTEREST. CAPITAL ANALYSTS IS IN THE PROCESS OF PAYING THE REMAINING PORTION OF DISGORGED FEES AND INTEREST IN THE AMOUNT OF $1,049,873 TO AFFECTED CLIENTS. Summary: ON SEPEMBER 14, 2018, THE SEC ACCEPTED CAPITAL ANALYSTS OFFER OF SETTLEMENT AND ISSUED AN ORDER INSTITUTING ADMINISTRATIVE AND CEASE-AND-DESIST PROCEEDINGS. WITHOUT ADMITTING OR DENYING THE SEC'S FINDINGS, CAPITAL ANALYSTS AGREED TO PAY DISGORGED FEES, INTEREST, AND A PENALTY TOTALING $2,120,349. ON 9/18/18, CAPITAL ANALYSTS PAID THE CIVIL PENALTY OF $300,000 AND $770,476 OF DISGORGED FEES AND INTEREST. CAPITAL ANALYSTS IS IN THE PROCESS OF PAYING THE REMAINING PORTION OF DISGORGED FEES AND INTEREST IN THE AMOUNT OF $1,049,873 TO AFFECTED CLIENTS.