{"id":7284,"date":"2019-08-16T13:56:41","date_gmt":"2019-08-16T18:56:41","guid":{"rendered":"https:\/\/www.investorlawyers.com\/?p=7284"},"modified":"2019-08-29T13:59:25","modified_gmt":"2019-08-29T18:59:25","slug":"commonwealth-accused-of-not-disclosing-revenue-deal-to-clients","status":"publish","type":"post","link":"https:\/\/www.investorlawyers.com\/blog\/commonwealth-accused-of-not-disclosing-revenue-deal-to-clients\/","title":{"rendered":"Commonwealth Accused of Not Disclosing Revenue Deal to Clients"},"content":{"rendered":"<p>The <a href=\"https:\/\/www.sec.gov\" target=\"_blank\" rel=\"noopener noreferrer\">US Securities and Exchange Commission (SEC)<\/a> is accusing Commonwealth Equity Services, also known as <a href=\"https:\/\/www.investorlawyers.com\/?s=Commonwealth+Financial+Network\" target=\"_blank\" rel=\"noopener noreferrer\">Commonwealth Financial Network<\/a>, of not notifying clients that it had material conflicts of interest involving certain investments. This purportedly allowed the investment adviser and brokerage firm to earn more than $100M in revenue sharing involving certain mutual funds.<\/p>\n<p>The SEC contends that since at least 2007, Commonwealth had a deal with National Financial Services and a Fidelity Investments affiliate that the majority of its Preferred Portfolio Service advisory clients were obligated to utilize when trading in their accounts. As part of the agreement, clients have to choose National Financial Services as its clearing broker for their investment accounts.<\/p>\n<p>Whenever these advisory clients would invest in specific mutual fund shares, Commonwealth received a portion of the money that certain mutual fund companies paid National Financial Services to make trades on the platform. Also as part of the deal between National Finance Services and Commonwealth is that the clearing broker would share recurring mutual fund fees with the investment adviser. This was determined by the latter\u2019s client assets that were invested in specific mutual fund share classes that didn\u2019t charge a transaction fee.<\/p>\n<div class=\"read_more_link\"><a href=\"https:\/\/www.investorlawyers.com\/blog\/commonwealth-accused-of-not-disclosing-revenue-deal-to-clients\/\"  title=\"Continue Reading Commonwealth Accused of Not Disclosing Revenue Deal to Clients\" class=\"more-link\">Continue Reading \u203a<\/a><\/div>\n","protected":false},"excerpt":{"rendered":"<p>The US Securities and Exchange Commission (SEC) is accusing Commonwealth Equity Services, also known as Commonwealth Financial Network, of not notifying clients that it had material conflicts of interest involving certain investments. This purportedly allowed the investment adviser and brokerage firm to earn more than $100M in revenue sharing involving certain mutual funds. The SEC [&hellip;]<\/p>\n","protected":false},"author":2,"featured_media":7092,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"footnotes":""},"categories":[3781,3738,3799],"tags":[4123,4124,4113],"class_list":["post-7284","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-investment-advisers","category-investor-fraud","category-mutual-funds","tag-bruce-worthington-i","tag-commonwealth-equity-services","tag-fidelity-investments"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.4 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Commonwealth Accused of Not Disclosing Revenue Deal to Clients &#8212; Investor Lawyers Blog &#8212; August 16, 2019<\/title>\n<meta name=\"description\" content=\"The SEC is accusing Commonwealth of not notifying clients that it had material conflicts of interest involving investments and breach of fiduciary duties.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.investorlawyers.com\/blog\/commonwealth-accused-of-not-disclosing-revenue-deal-to-clients\/\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:title\" content=\"Commonwealth Accused of Not Disclosing Revenue Deal to Clients &#8212; 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Investor Lawyers Blog &#8212; August 16, 2019","twitter_description":"The SEC is accusing Commonwealth of not notifying clients that it had material conflicts of interest involving investments and breach of fiduciary duties.","twitter_image":"https:\/\/www.investorlawyers.com\/blog\/wp-content\/uploads\/2019\/05\/stock-sheets-overlay.jpg","twitter_misc":{"Written by":"Shepherd Smith Edwards &amp; Kantas, LLP","Est. reading time":"2 minutes"},"schema":{"@context":"https:\/\/schema.org","@graph":[{"@type":"Article","@id":"https:\/\/www.investorlawyers.com\/blog\/commonwealth-accused-of-not-disclosing-revenue-deal-to-clients\/#article","isPartOf":{"@id":"https:\/\/www.investorlawyers.com\/blog\/commonwealth-accused-of-not-disclosing-revenue-deal-to-clients\/"},"author":{"name":"Shepherd Smith Edwards &amp; Kantas, LLP","@id":"https:\/\/www.investorlawyers.com\/blog\/#\/schema\/person\/e0240e0754684b69f7d6a7de1b9f1431"},"headline":"Commonwealth Accused of Not Disclosing Revenue Deal to Clients","datePublished":"2019-08-16T18:56:41+00:00","dateModified":"2019-08-29T18:59:25+00:00","mainEntityOfPage":{"@id":"https:\/\/www.investorlawyers.com\/blog\/commonwealth-accused-of-not-disclosing-revenue-deal-to-clients\/"},"wordCount":415,"image":{"@id":"https:\/\/www.investorlawyers.com\/blog\/commonwealth-accused-of-not-disclosing-revenue-deal-to-clients\/#primaryimage"},"thumbnailUrl":"https:\/\/www.investorlawyers.com\/blog\/wp-content\/uploads\/2019\/05\/stock-sheets-overlay.jpg","keywords":["Bruce Worthington i","Commonwealth Equity Services","Fidelity Investments"],"articleSection":["Investment Advisers","Investor Fraud","Mutual Funds"],"inLanguage":"en-US"},{"@type":"WebPage","@id":"https:\/\/www.investorlawyers.com\/blog\/commonwealth-accused-of-not-disclosing-revenue-deal-to-clients\/","url":"https:\/\/www.investorlawyers.com\/blog\/commonwealth-accused-of-not-disclosing-revenue-deal-to-clients\/","name":"Commonwealth Accused of Not Disclosing Revenue Deal to Clients &#8212; 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