SEC Hits Madison Avenue Securities with $800,000 Fine for Violations 

Madison Avenue Securities Allegedly Failed to Disclose Conflicts with Compensation 

According to an SEC order on May 31, the Securities and Exchange Commission ordered Madison Avenue Securities (CRD#: 23224/SEC#: 801-69919,8-40426) to pay more than $800,000 to settle charges that it breached its fiduciary duty with its mutual fund share-class selection practices as well as conflicts with mutual fund compensation, including cash sweep money market funds. 

The regulator found that since February 2016, Madison Avenue Securities allegedly failed to disclose conflicts in connection with compensation the firm received from certain advisory client investments, including: cash sweep money market funds for which Madison received revenue sharing; mutual funds that resulted in Madison Avenue receiving fees from at least February 2016 through April 2018, when lower-cost share classes of the same funds became available to those clients; and no-transaction-fee mutual funds for which Madison Avenue also received revenue sharing. 

Madison Avenue Securities agreed to pay $580,000 in disgorgement, $74,000 in prejudgment interest and a $150,000 fine, according to the order. 

In February 2018, the SEC launched its Share Class Selection Disclosure Initiative to encourage firms to self-report for recommending high-fee mutual funds (12B -1 fees) to their clients when lower fee options were available. Madison Avenue Securities reportedly failed to self-report in connection with the 12B-1 fees, according to the order. 

To learn more about the firm please see: Madison Avenue Securities Review – Broker Fraud, Lawsuits and Regulatory Actions 

Potential Lawsuits to Recover Financial Losses  

This information is all publicly available and provided to you by the White Law Group. For a free consultation with a securities attorney, please call the White Law Group at (888) 637-5510.      

The White Law Group, LLC is a national securities fraud, securities arbitration, investor protection, and securities regulation/compliance law firm with offices in Chicago, Illinois and Seattle, Washington. For more information, please visit our website, www.whitesecuritieslaw.com.