Efs Advisors Llc

Allegations: EDUCATORS FINANCIAL, A REGISTERED INVESTMENT ADVISER THAT PRIMARILY MARKETS ITS SERVICES TO TEACHERS, VIOLATED THE ADVISERS ACT AS A RESULT OF ITS BILLING PRACTICES AND MUTUAL FUND SHARE CLASS SELECTION FOR CLIENTS. WITH RESPECT TO ITS BILLING PRACTICES, EDUCATORS FINANCIAL (I) FAILED TO CONSISTENTLY AGGREGATE THE VALUE OF ALL ACCOUNTS HELD BY FAMILY MEMBERS LIVING IN THE SAME HOUSEHOLD WHEN DETERMINING THE FEE RATE, CAUSING CERTAIN CLIENTS TO PAY A HIGHER ADVISORY FEE THAN THEY SHOULD HAVE; AND (II) FAILED TO REFUND PRE-PAID ADVISORY FEES AFTER CLIENTS TERMINATED THE ADVISORY RELATIONSHIP. EDUCATORS FINANCIAL ALSO 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 THAT WERE AVAILABLE TO THE CLIENTS. EDUCATORS FINANCIAL FAILED TO ADEQUATELY DISCLOSE ALL MATERIAL FACTS REGARDING THIS CONFLICT OF INTEREST AND BREACHED ITS DUTY TO SEEK BEST EXECUTION BY CAUSING CERTAIN ADVISORY CLIENTS TO INVEST IN FUND SHARE CLASSES THAT CHARGED 12B-1 FEES WHEN SHARE CLASSES OF THE SAME FUNDS THAT PRESENTED A MORE FAVORABLE VALUE FOR THESE CLIENTS UNDER THE PARTICULAR CIRCUMSTANCES IN PLACE AT THE TIME OF THE TRANSACTIONS WERE AVAILABLE TO THE CLIENTS. FINALLY, EDUCATORS FINANCIAL FAILED TO ADOPT AND IMPLEMENT WRITTEN COMPLIANCE POLICIES AND PROCEDURES REASONABLY DESIGNED TO PREVENT VIOLATIONS OF THE ADVISERS ACT AND THE RULES THEREUNDER IN CONNECTION WITH ITS BILLING PRACTICES AND ITS MUTUAL FUND SHARE CLASS SELECTION. Status: Final Sanction Detail: N/A Summary: ORDER ISSUED AUGUST 27, 2021. EFS TO PROVIDE NOTICE TO ADVISORY CLIENTS BY OCTOBER 11, 2021. TO RETAIN AN INDEPENDENT COMPLIANCE CONSULTANT BY OCTOBER 11, 2021, ("ICC"). ICC REVIEWED AND REPORTED ON EFS PRACTICES AND TO CONDUCT SECOND REVIEW 365 DAYS AFTER ISSUANCE OF INITIAL REPORT. EFS ADOPTED ICC'S RECOMMENDATIONS. EFS PAID DISGORGEMENT, PRE-JUDGMENT INTEREST AND CIVIL PENALTY THROUGH USE OF A QUALIFED SETTLEMENT FUND. FINAL ACCOUNTING AND RECONCILIATION DELIVERED TO THE SEC ON 12/07/2022. SEC ISSUED ORDER 1/31/2024 NOTING RESOLUTION, APPROVAL, AND TERMINATION.