Fiduciary duty violations cost adviser

BFC’s Form ADV Part 2A brochures disclosed that advisory clients “may incur” 12b-1 fees, and that because IARs “may receive 12b-1 fees … there is a potential conflict of interest.” BFC did not disclose the conflicts of interest that arose when it invested advisory clients in a mutual fund share class that would generate 12b-1 fee revenue for BFCFS and for BFC’s IARs, while share classes of the same funds that did not pay 12b-1 fees were available to its clients