The SEC announced settled charges against investment adviser, Advance Capital Management, Inc., for causing a registered investment company it managed, Advance Capital I, Inc. (ACI), to include materially false and misleading information in ACI's application to deregister as a registered investment company filed with the SEC. The filing failed to disclose the existence of pending claims in certain class actions, which Advance Capital Management collected after ACI disbanded. The SEC's order noted that the plan of liquidation approved by ACI's board included a limit on the expenses Advance Capital Management could charge to protect investors, but permitted the adviser to be reimbursed for waived expenses if approved by the Board. Advance Capital Management liquidated the funds pursuant to the Board-approved plan but did not liquidate the class action claims. The adviser reportedly tracked its expenses through the liquidation process, calculating that it cost the firm $518,433 in costs and forgone fees. The adviser subsequently created a compliance policy allowing it to keep proceeds from ACI's class action claims as reimbursement for the costs that it incurred in liquidating the funds, and presumably could have requested approval from ACI's board to reimburse such expenses. However, given the disclosure failures, the firm agreed to pay nearly $600,000 to settle the case, including disgorgement, prejudgment interest, and a civil penalty.