On November 5, 2020, Capitol Securities Management, Inc. settled charges in connection with its mutual fund share class selection practices and its receipt of fees pursuant to Rule 12b-1 under the Investment Company Act of 1940 (“12b-1 fees”). At times during the period from January 1, 2014 through December 31, 2016 (the “Relevant Period”), CSM purchased, recommended, or held for certain advisory clients mutual fund share classes that charged 12b-1 fees instead of lower-cost share classes of the same funds that were available to the clients. CSM and its investment adviser representatives (“IARs”), in their capacities as registered representatives of CSM, received 12b-1 fee revenue in connection with these investments. CSM did not adequately disclose this conflict of interest in its Forms ADV or otherwise. CSM also breached its duty to seek best execution, by causing certain advisory clients to invest in fund share classes that charged 12b-1 fees when share classes of the same funds that presented a more favorable value for these clients under the particular circumstances in place at the time of the transactions were available to the clients. Capitol Securities agreed to disgorgement and prejudgment interest, totaling $203,414. [https://www.sec.gov/litigation/admin/2020/34-90361.pdf]