This Week in Wealth Commonwealth beats the SEC, no degree for the CFP?
Mar 27, 2026
A legal saga over a huge SEC penalty and how a drawn-out court fight slashed it to a fraction. Deep dive into fee-splitting mechanics and what the settlement signals about enforcement trends. Debate on the CFP Board weighing removal of the bachelor’s degree for certification and how standards, competency, and accessibility might shift. Quick market takes from an RIA summit and light sports banter to close.
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Commonwealth Cut SEC Penalty From $93m To $5m
- Commonwealth fought a 2019 SEC action over share-class fee splits and reduced a proposed $93m judgment to a $5m settlement after years of appeals.
- A federal judge found material issues of fact and the parties agreed to the smaller settlement in 2026, so clients won't receive the original disgorgement.
Settlement Reflects Changing SEC Enforcement Priorities
- The reduced settlement signals a shift in enforcement focus at the SEC under new leadership toward clear fraud cases rather than marginal conduct.
- Ian notes the SEC's priorities changed with leadership turnover and resource trade-offs influencing whether to litigate long appeals or accept smaller settlements.
Weigh Litigation Costs Versus Settlement Certainty
- Firms should weigh the cost and duration of litigation against likely enforcement outcomes when deciding whether to fight SEC actions.
- Ian suggests regulators and firms may accept smaller settlements to avoid multi-year appeals that consume resources.