Background

The United States Securities and Exchange Commission (“SEC” or “Commission”) established a Fair Fund (the "KM Advisory Services Fair Fund") comprising disgorgement, prejudgment interest, and civil money penalties paid by Kathryn Jane Meredith, d/b/a KM Advisory Services (“Meredith”) and John Paul Harnish, d/b/a KM Advisory Services (“Harnish”) (collectively, the “Respondents”) to compensate investors who were harmed by the Respondents’ conduct in connection with breaches of their fiduciary duties, including their respective failures to disclose their conflicts of interest.

On June 6, 2022, the Commission instituted and simultaneously settled, separate but related, administrative and cease-and-desist proceedings (the “Orders”) against the Respondents.  In the Orders, the Commission found that former registered investment adviser KM Advisory Services (“KMA”) – an unincorporated sole-proprietorship owned by Meredith from 1994 through February 2020, and purchased by Harnish in February 2020 – breached its fiduciary duties in connection with the receipt of mutual fund fees pursuant to Rule 12b-1 under the Investment Company Act of 1940 (“12b-1 fees”) and commissions in the form of sales “loads” from advisory client investments without fully and fairly disclosing its related conflicts of interest.

The Fair Fund consists of the $1,052,641.99 paid by the Respondents.  The assets of the Fair Fund are subject to the continuing jurisdiction and control of the Commission.  The Fair Fund has been deposited in a Commission-designated account at the U.S. Department of the Treasury, and any accrued interest will be added to the Fair Fund.

On July 31, 2023, the Commission appointed KCC Class Action Services, LLC, (“KCC”) as the Fund Administrator for the Fair Fund (the “Fund Administrator”). The Fund Administrator is responsible for administering the Fair Fund in accordance with the Plan.

On September 28, 2023, the Commission approved a Plan of Distribution for the KMA Advisory Services Fair Fund (the "Plan").