With a four month amnesty period for firms to self-report violations related to share class selection expired, the SEC’s follow-up sweep of firms that did not volunteer information to the regulator is swiftly moving ahead. Amy Lynch, FrontLine’s Founder and President, explains that the sweep letters being received by firms are a typical response by the SEC following a request for voluntary reporting. Further, Ms. Lynch cautions that the SEC has a historical practice of making examples of firms that did not self-report through Enforcement actions that would include the maximum fines possible for significant violations. See IGNITES (subscription required), “SEC Probes Share-Class, Revenue Sharing Violations.”
