The Securities and Exchange Commission (SEC) has announced settled charges against San Juan, Puerto Rico-based registered investment adviser Catalyst Capital Advisors LLC for entering into an impermissible joint legal fee arrangement with its client, Mutual Fund Series Trust, an SEC-registered open-end investment company, which resulted in the mutual fund temporarily paying a disproportionately high amount of fees.
The SEC’s order finds that Catalyst improperly arranged for the Trust to pay, at least initially, the legal fees and expenses associated with regulatory inquiries and private litigation following significant losses at the Catalyst Hedged Futures Strategy Fund, a series of the Trust.
As set forth in the order, Catalyst and the Trust began receiving inquiries from the SEC and another regulator beginning in February 2017 related to the Hedged Futures Fund losses,…
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