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SEC enforcement update: Lessons on compensation-driven conflicts

The U.S. Securities and Exchange Commission seal hangs on the facade of its building.
Photo: Chip Somodevilla/Getty Images

Recent cases highlight the SEC’s continuing focus on how financial incentives influence employee recommendations.

The SEC recently announced two enforcement actions against advisory firms that failed to provide clear and consistent disclosures around conflicts of interest tied to fee-based managed account programs. Both cases underscore the Commission’s continuing focus on how financial incentives influence employee recommendations – and the need for firms to adopt