The SEC charged RIA, Foundations Investment Advisors, LLC, and former CEO Bryon E. Rice for alleged breaches of fiduciary duty arising from undisclosed conflicts related to personal holdings and economic incentives connected to investment products and affiliated relationships. The undisclosed conflicts included: (1) Rice having an economic interest in a sub-adviser that provided an investment model portfolio to Foundations’ clients, a portfolio that included an exchange-traded fund (“ETF”) that another adviser managed; (2) Foundations having an expense sharing agreement with another adviser related to four other ETFs that gave Foundations an incentive to recommend these products to clients; and (3) affiliations among Foundations’ former chief investment officer (the “CIO”), the adviser, and an entity that acted as a sub-adviser to Foundations and for the ETF. Rice failed to pre-clear his trades, including the ETF in question, as required under the firm's Code of Ethics. The SEC noted that the firm failed to identify the CIO as an access person who was subject to the Code of Ethics. In addition, the SEC noted other failures involving compliance-program implementation and failure to conduct an annual compliance review for calendar year 2021. The adviser who manages more than $10 billion in RAUM, agreed to pay approximately $152,628 in disgorgement, $15,031 in prejudgment interest, and a $1.2 million civil penalty. The case highlights the importance of ensuring compliance with all requirements under advisers' compliance manuals, and enforcing pre-approval requirements under the Code of Ethics, as critical controls in preventing and detecting undisclosed conflicts.