Category: Section 15(c)


SEC Charges Mutual Fund Board Members and Investment Adviser with Violations of Section 15(c) For Deficient Advisory Contract Approval Process

Posted on July 1st, by and in Board of Directors, Investment Advisers, Section 15(c). Comments Off on SEC Charges Mutual Fund Board Members and Investment Adviser with Violations of Section 15(c) For Deficient Advisory Contract Approval Process

On June 17, 2015, the SEC charged Commonwealth Capital Management (“CCM”), an investment adviser to various mutual funds within World Funds Trust (“WFT”) and World Funds, Inc. (“WFI”), for violating Section 15(c) of the Investment Company Act by providing incomplete and inaccurate information to two mutual fund boards, and CCM’s majority owner John Pasco with causing the violations. It further charged three former trustees of the WFT board, J. Gordon McKinley III, Robert R. Burke, and Franklin A. Trice III, with Section 15(c) violations because they did not follow up with CCM to obtain the requested information that was never provided. Instead, they approved CCM’s advisory contracts for the WFT Funds without the reasonably necessary information needed to evaluate the terms of the contracts.

Section 15(c) requires that a majority of the fund’s independent directors approve the terms of any advisory … Read More »




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