ADMINISTRATIVE PROCEEDING
File No. 3-21780

October 10, 2023 - The Securities and Exchange Commission today announced settled charges against Wilmington Trust Investment Management, LLC, a Delaware-based registered investment adviser, for breaches of its fiduciary duties.

According to the SEC's order, WTIM did not fully and fairly disclose to advisory clients conflicts of interest associated with its use of mutual fund share classes through a no-transaction fee program offered by its clearing firm. As set forth in the order, WTIM was responsible for paying transaction fees for trades on behalf of its wrap clients. The order finds WTIM avoided incurring such transaction fees by (i) investing certain clients' assets in mutual fund share classes that were higher in cost to the clients than other available share classes of the same funds; and (ii) exchanging clients' existing assets in mutual funds for other investments in the same sector that had higher expense ratios. The order also finds that WTIM breached its duty of care, including its duty to seek best execution, in connection with the selection of mutual fund share classes for clients. In addition, the order finds WTIM failed to implement written compliance policies and procedures reasonably designed to prevent violations of the Advisers Act.

The SEC's order finds that WTIM violated the antifraud and compliance provisions of Sections 206(2) and 206(4) of the Investment Advisers Act of 1940 and Rule 206(4)-7 thereunder. Without admitting or denying the findings, WTIM consented to a cease-and-desist order and a censure. WTIM agreed to pay disgorgement of $999,559 with prejudgment interest of $77,588 and a civil penalty of $250,000. According to the order, after being contacted by Commission staff, WTIM reimbursed financially harmed advisory clients, with interest.

The SEC's investigation was conducted by Oreste McClung of the Division of Enforcement's Asset Management Unit, with the assistance of Aidan Busch, John Cajulis, Brian Carroll, Darshan Gulati, and Eric Whitman of the Division of Examinations, all from the Philadelphia Regional Office. The investigation was supervised by Brendan McGlynn, Corey Schuster, and Andrew Dean of the Asset Management Unit.