On April 30, 2026, the Securities and Exchange Commission issued Release No. 34-105341 ordering the termination of the American Portfolio Advisors, Inc. Fair Fund, transferring $206,704.64 in undeliverable investor compensation to the U.S. Department of the Treasury. The Fair Fund was established following a December 20, 2018 SEC administrative order that found the Holbrook, New York-based registered investment adviser, whose parent company American Portfolios Holdings, Inc. is principally owned by CEO and president Lon Dolber, had willfully violated Sections 206(2), 206(4), and 207 of the Investment Advisers Act of 1940 and Rule 206(4)-7 thereunder. APA was ordered to pay $850,000 in disgorgement, $45,353 in prejudgment interest, and $250,000 in civil penalties, for a total of $1,145,353. Of that amount, 4,681 payments totaling $938,648.79 were successfully delivered to harmed investors. The remaining $206,704.64 consisting of uncashed checks, returned funds, and residual rounding amounts could not be returned to investors and is now being sent to the Treasury. The final accounting has been approved by the Commission and the Fair Fund is closed.
An Adviser That Told Clients It Did Not Collect 12b-1 Fees Was Collecting Them the Entire Time
The 2018 enforcement action arose from APA’s mutual fund share class selection practices. According to the SEC’s December 2018 order, APA invested advisory clients in mutual fund share classes that paid 12b-1 fees to the firm’s investment adviser representatives, even though less expensive share classes of the same funds were available. The conflict was direct: APA’s advisers had a financial incentive to place clients in the higher-cost share class, and they did. What made the violation worse was what APA told clients. In its disclosures, APA incorrectly stated that its investment adviser representatives either did not receive 12b-1 fees at all, or that it only selected more expensive share classes when less expensive share classes of the same fund were unavailable. Both statements were false as a matter of practice. The SEC found that APA failed to disclose the conflict of interest, violated its duty to seek best execution, and failed to implement policies and procedures designed to prevent violations of federal securities laws in connection with share class selection.
The case was part of the SEC’s broader Share Class Disclosure Initiative, under which the Commission brought coordinated enforcement actions against dozens of investment advisers across the country who had engaged in the same undisclosed 12b-1 fee practice. APA settled without admitting or denying the findings.
4,681 Payments Were Made to Investors, Ranging From One Cent to Nearly $7,600
APA was ordered to administer the Fair Fund at its own expense, calculating and distributing the amounts owed to each harmed advisory client based on methodology specified in the SEC’s order. The distribution process resulted in 4,681 individual payments totaling $938,648.79, with amounts ranging from $0.01 to $7,593.68. The wide range reflects the varying degrees to which individual clients were affected by the overcharging. APA made additional efforts to reach investors who did not cash checks, refreshing mailing addresses and reissuing checks where needed. A de minimis amount of $20 was applied to closed accounts rather than distributed. Despite these efforts, $206,704.64 remained undeliverable. Under the terms of the SEC’s order and the Fair Fund provisions of the Sarbanes-Oxley Act, those amounts are now transferred to the U.S. Treasury.
APA Was Hit With a Second Enforcement Action in July 2025 Before Withdrawing Its SEC Registration
The 2018 mutual fund matter was not APA’s only encounter with the SEC. In July 2025, the Commission brought a separate enforcement action against APA covering conduct from August 2020 through March 2023. The SEC’s 2025 order found that APA breached its fiduciary duty by failing to disclose conflicts of interest related to compensation paid to its affiliated broker-dealer by an unaffiliated clearing broker. The firm also erroneously billed advisory fees on alternative investment positions that were supposed to be fee-exempt, and failed to refund pro-rata portions of prepaid quarterly advisory fees when clients terminated accounts. Most significantly, when SEC staff requested documents during a compliance examination, former Chief Compliance Officer Colin Michael Moors created and backdated compliance documents for three calendar years and signed them alongside former president Gary Bruce Gordon before providing them to SEC examiners. APA consented to a $1,750,000 civil penalty in the 2025 matter. Moors was penalized $10,000 and Gordon $20,000.
APA’s SEC registration, which dated to April 8, 2002, was withdrawn on October 29, 2024, when its Form ADV-W became effective. The firm is no longer a registered investment adviser.
Conclusion
The closure of the American Portfolio Advisors Fair Fund represents the administrative end of a case that began with a straightforward conflict of interest: advisers recommending higher-cost mutual fund share classes that paid them 12b-1 fees while telling clients they were not receiving those fees. The $938,648 that reached investors represents compensation for real losses caused by that practice. The $206,704 heading to the Treasury represents what could not be delivered, uncashed checks from clients who could not be located or who did not respond. The firm that administered the fund no longer exists as a registered adviser. Its CCO and president separately admitted to backdating compliance documents provided to SEC examiners. The 2018 matter is closed. The 2025 one is settled.
