Stonex Advisors Inc.

Allegations: THE SECURITIES AND EXCHANGE COMMISSION (SEC) HAS ENTERED AN ORDER (THE "ORDER") AGAINST SA STONE INVESTMENT ADVISORS INC. IN THE SEC'S SHARE CLASS SELECTION DISCLOSURE INITIATIVE, IN WHICH SA STONE INVESTMENT ADVISORS VOLUNTARILY PARTICIPATED. IN THE ORDER, THE SEC FOUND THAT AT TIMES DURING THE PERIOD FROM DECEMBER 2014 TO AUGUST 2018 SA STONE PURCHASED, RECOMMENDED OR HELD FOR ADVISORY CLIENTS MUTUAL FUND SHARE CLASSES THAT CHARGED 12B-1 FEES INSTEAD OF LOWER-COST SHARE CLASSES OF THE SAME FUNDS FOR WHICH THE CLIENTS WERE ELIGIBLE. SA STONE'S AFFILIATED BROKER-DEALER RECEIVED 12B-1 FEES IN CONNECTION WITH THESE INVESTMENTS, AND SA STONE FAILED TO DISCLOSE IN ITS FORM ADV OR OTHERWISE THE CONFLICTS OF INTEREST RELATED TO (A) ITS RECEIPT OF 12B-1 FEES AND/OR (2) ITS SELECTION OF MUTUAL FUND SHARE CLASSES THAT PAY SUCH FEES. THE SEC (1) CENSURED SA STONE INVESTMENT ADVISORS, (2) FOUND THAT SA STONE WILLFULLY VIOLATED SECTIONS 206(2), WHICH MAKES IT UNLAWFUL FOR ANY INVESTMENT ADVISOR, DIRECTLY OR INDIRECTLY, TO "ENGAGE IN ANY TRANSACTION, PRACTICE OR COURSE OF BUSINESS WHICH OPERATES AS A FRAUD OR DECEIT UPON ANY CLIENT OR PROSPECTIVE CLIENT," (3) FOUND THAT SA STONE WILLFULLY VIOLATED SECTION 207 OF THE ADVISORS ACT, WHICH MAKES IT UNLAWFUL FOR ANY PERSON WILLFULLY TO MAKE ANY UNTRUE STATEMENT OF A MATERIAL FACT IN ANY REGISTRATION APPLICATION OR REPORT FILED WITH THE COMMISSION ? OR WILLFULLY TO OMIT TO STATE IN ANY SUCH APPLICATION OR REPORT ANY MATERIAL FACT WHICH IS REQUIRED TO BE STATED THEREIN," (4) ORDERED SA STONE TO CEASE AND DESIST FROM COMMITTING OR CAUSING ANY VIOLATIONS AND ANY FUTURE VIOLATIONS OF SECTIONS 206(2) AND 207 OF THE ADVISORS ACT, (5) ORDERED SA STONE TO PAY DISGORGEMENT OF $638,464.31 AND INTEREST OF $48,909.70, AND (5) ORDERED SA STONE TO COMPLY WITH CERTAIN UNDERTAKINGS RELATING TO REMEDIATION, DISTRIBUTION OF FUNDS TO INVESTORS, AND CERTIFICATION OF COMPLIANCE. Status: Final Sanction Detail: DISGORGEMENT OF $638,464.31 AND INTEREST OF $48,909.70 Summary: THE SECURITIES AND EXCHANGE COMMISSION (SEC) HAS ENTERED AN ORDER (THE "ORDER") AGAINST SA STONE INVESTMENT ADVISORS INC. IN THE SEC'S SHARE CLASS SELECTION DISCLOSURE INITIATIVE, IN WHICH SA STONE INVESTMENT ADVISORS VOLUNTARILY PARTICIPATED. IN THE ORDER, THE SEC FOUND THAT AT TIMES DURING THE PERIOD FROM DECEMBER 2014 TO AUGUST 2018 SA STONE PURCHASED, RECOMMENDED OR HELD FOR ADVISORY CLIENTS MUTUAL FUND SHARE CLASSES THAT CHARGED 12B-1 FEES INSTEAD OF LOWER-COST SHARE CLASSES OF THE SAME FUNDS FOR WHICH THE CLIENTS WERE ELIGIBLE. SA STONE'S AFFILIATED BROKER-DEALER RECEIVED 12B-1 FEES IN CONNECTION WITH THESE INVESTMENTS, AND SA STONE FAILED TO DISCLOSE IN ITS FORM ADV OR OTHERWISE THE CONFLICTS OF INTEREST RELATED TO (A) ITS RECEIPT OF 12B-1 FEES AND/OR (2) ITS SELECTION OF MUTUAL FUND SHARE CLASSES THAT PAY SUCH FEES. THE SEC (1) CENSURED SA STONE INVESTMENT ADVISORS, (2) FOUND THAT SA STONE WILLFULLY VIOLATED SECTIONS 206(2), WHICH MAKES IT UNLAWFUL FOR ANY INVESTMENT ADVISOR, DIRECTLY OR INDIRECTLY, TO "ENGAGE IN ANY TRANSACTION, PRACTICE OR COURSE OF BUSINESS WHICH OPERATES AS A FRAUD OR DECEIT UPON ANY CLIENT OR PROSPECTIVE CLIENT," (3) FOUND THAT SA STONE WILLFULLY VIOLATED SECTION 207 OF THE ADVISORS ACT, WHICH MAKES IT UNLAWFUL FOR ANY PERSON WILLFULLY TO MAKE ANY UNTRUE STATEMENT OF A MATERIAL FACT IN ANY REGISTRATION APPLICATION OR REPORT FILED WITH THE COMMISSION ? OR WILLFULLY TO OMIT TO STATE IN ANY SUCH APPLICATION OR REPORT ANY MATERIAL FACT WHICH IS REQUIRED TO BE STATED THEREIN," (4) ORDERED SA STONE TO CEASE AND DESIST FROM COMMITTING OR CAUSING ANY VIOLATIONS AND ANY FUTURE VIOLATIONS OF SECTIONS 206(2) AND 207 OF THE ADVISORS ACT, (5) ORDERED SA STONE TO PAY DISGORGEMENT OF $638,464.31 AND INTEREST OF $48,909.70, AND (5) ORDERED SA STONE TO COMPLY WITH CERTAIN UNDERTAKINGS RELATING TO REMEDIATION, DISTRIBUTION OF FUNDS TO INVESTORS, AND CERTIFICATION OF COMPLIANCE.