Hazlett, Burt & Watson, Inc.

Allegations: IA RELEASE 5183, MARCH 11, 2019: THE COMMISSION FOUND THAT THESE PROCEEDINGS AROSE OUT OF BREACHES OF FUDUCIARY DUTY AND INADEQUATE DISCLOSURES BY HAZLETT, BURT & WATSON, INC. ("RESPONDENT") IN CONNECTION WITH ITS MUTUAL FUND SHARE CLASS SELECTION PRACTICES AND THE FEES IT RECEIVED. THE COMMISSION FOUND THAT, AT TIMES DURING THE RELEVANT PERIOD, RESPONDENT 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. THE COMMISSION FOUND THAT RESPONDENT RECEIVED 12B-1 FEES IN CONNECTION WITH THESE INVESTMENTS, AND THAT RESPONDENT FAILED TO DISCLOSE IN ITS FORM ADV OR OTHERWISE THE CONFLICTS OF INTEREST RELATED TO (A) ITS RECEIPT OF 12B-1 FEES, AND/OR (B) ITS SELECTION OF MUTUAL FUND SHARE CLASSES THAT PAY SUCH FEES. THE COMMISSION FOUND THAT, DURING THE RELEVANT PERIOD, RESPONDENT RECEIVED 12B-1 FEES FOR ADVISING CLIENTS TO INVEST IN OR HOLD SUCH MUTUAL FUND SHARE CLASSES. THE COMMISSION FOUND THAT, AS A RESULT OF THE CONDUCT, RESPONDENT WILLFULLY VIOLATED SECTIONS 206(2) AND 207 OF THE ADVISERS ACT. Status: Final Sanction Detail: THE RESPONDENT SHALL CEASE AND DESIST FROM COMMITTING OR CAUSING ANY VIOLATIONS AND ANY FUTURE VIOLATIONS OF SECTIONS 206(2) AND 207 OF THE ADVISERS ACT. RESPONDENT IS CENSURED, SHALL PAY DISGORGEMENT OF $120,847.45 AND PREJUDGMENT INTEREST OF $2,608.66, AND SHALL COMPLY WITH THE UNDERTAKINGS ENUMERATED IN THE OFFER OF SETTLEMENT. Summary: RESPONDENT SUBMITTED AN OFFER OF SETTLEMENT, WHICH THE COMMISSION ACCEPTED AND IMPOSED THE SANCTIONS AGREED TO IN THE RESPONDENT'S OFFER. RESPONDENT SELF-REPORTED TO THE COMMISSION THE VIOLATIONS DISCUSSED IN THE ORDER PURSUANT TO THE DIVISION OF ENFORCEMENT'S SHARE CLASS SELECTION DISCLOSURE INITIATIVE ("SCSD INITIATIVE"). RESPONDENT CONSENTED TO THE ENTRY OF THE ORDER SOLELY FOR THE PURPOSE OF THESE PROCEEDINGS AND ANY OTHER PROCEEDINGS BROUGHT BY OR ON BEHLF OF THE COMMISSION, OR TO WHICH THE COMMISSION IS A PARTY, WITHOUT ADMITTING OR DENYING THE FINDINGS THEREIN, EXCEPT AS TO THE COMMISSION'S JURISDICTION OVER IT AND THE SUBJECT MATTER OF THE PROCEEDINGS.