The Securities and Exchange Commission charged Commonwealth Equity Services LLC with failing to disclose conflicts of interest regarding a revenue-sharing scheme with a broker.

The regulator alleges that the company had a revenue-sharing agreement since at least 2007 with a broker that it required most of its clients to use for trades in their accounts. According to the complaint, Commonwealth received a portion of the money that mutual fund companies paid to the broker if Commonwealth invested client assets in certain share classes of the funds.

The SEC accuses Commonwealth of receiving over $100 million under the scheme from July 2014 to December 2018 as a result of clients investing in certain asset classes of "no transaction fee" and "transaction fee" mutual funds.

The SEC alleges that the company did not tell clients that there were mutual fund classes cheaper than those that resulted in revenue-sharing payments, funds that did not result in any revenue-sharing payments, or that there was a revenue-sharing scheme for mutual funds with a transaction fee. The failure to make these disclosures resulted in clients investing without fully understanding the company's compensation motives and incentives, according to the complaint.