SEC Orders AssetMark Inc. to Pay $18 Million to Settle Charges of Undisclosed Conflict of Interests.

SEC Orders AssetMark Inc. to Pay $18 Million to Settle Charges of Undisclosed Conflict of Interests.

The Securities and Exchange Commission (SEC) has announced that AssetMark Inc., an investment advisor based in Concord, California, has agreed to pay more than $18 million to settle charges related to the company's conflicts of interest. According to the SEC’s order, from September 2016 to January 2021, AssetMark failed to inform clients that it was helping to set the fee received by its affiliate custodian for operating a cash sweep program which affected the amount of interest paid to those clients. Additionally, the SEC found that between January 2016 and August 2019, AssetMark accepted payments from some third-party custodians for assets held in certain no-transaction-fee mutual funds without disclosing to its clients that lower-fee share classes were available which could have saved them money. The order finds that AssetMark has violated the antifraud and compliance provisions of the Investment Advisers Act and as such has consented to a cease-and-desist order requiring it to pay a civil penalty of $9.5 million and disgorgement and prejudgment interest of more than $8.5 million, all of which is to be distributed to harmed investors. The investigation was conducted under the supervision of Jeremy Pendrey, Andrew Dean and Corey Schuster from the Division of Enforcement’s Asset Management Unit; with assistance from staff from the San Francisco Regional Office’s Division of Examinations.

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