SEC Charges Investment Adviser with Improperly Using Mutual Fund Assets to Pay Distribution Fees

The SEC charged an adviser and its affiliated distributor with improperly using mutual fund assets to pay for the marketing and distribution of fund shares. The SEC said that the case is the first arising out of a recent SEC initiative, called the "Distribution-in-Guise Initiative." Under this initiative, the SEC is seeking to determine whether mutual fund advisers are improperly using fund assets to pay for marketing by masking the payments as payments to a service provider.