These proceedings arise out of breaches of fiduciary duty and inadequate disclosures by registered investment adviser RBC Capital Markets, LLC in connection with its mutual fund share class selection practices and the fees it and its associated persons received pursuant to Rule 12b-1 under the Investment Company Act of 1940 (“12b-1 fees”). At times during the period
January 1, 2014 to March 27, 2017 (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. Respondent and its associated persons received 12b-1 fees in connection with these investments. Respondent withheld information with the intent to deceive 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. During the Relevant Period, Respondent and its associated persons received 12b-1 fees for advising clients to invest in or hold
such mutual fund share classes.