Gurbir Grewal, the new director of the Division of Enforcement for the SEC, signaled several potential changes in the SEC’s enforcement priorities under his new leadership. His division would “recommend aggressive use” of various remedies, notably, seeking admissions of wrongdoing as a condition of settlement in certain instances. Some specific penalties include: Barring violators from […]
The North American Securities Administrators Association (NASAA) published its annual enforcement report on Sept. 29. In the report, state securities regulators conducted an increasing number of investigations and enforcement actions related to digital assets, precious metals and other commodities, internet and social media schemes, and self-directed individual retirement accounts. In its report, based on 2020 […]
The SEC recently took enforcement actions against three Registered Investment Advisers (RIAs) that breached their fiduciary duty to advisory clients. In particular, the SEC took disciplinary action against RIAs over issues related to 12b-1 fees, revenue sharing arrangements and wrap fee programs. In brief: The SEC found that one of the firms failed to report […]
The SEC has been watching wrap fee programs for quite a while. From 2017-19, the SEC’s annual examination priorities named wrap fee programs as putting investors at risk. The SEC’s Division of Examinations (Division) released a July 21, 2021 Risk Alert with guidance from examiners during its Wrap Fee Initiative. The Risk Alert, “Observations from […]
On July 26, 2021, the SEC announced that 21 Registered Investment Advisers (RIAs) settled charges alleging that they failed to file and deliver their client relationship summaries, known as Form CRS, in a timely manner. Form CRS is also frequently referred to as Form ADV Part 3. Six broker-dealers were also accused of not filing […]
A Registered Investment Adviser’s (RIA) and its Investment Adviser Representatives’ (IARs) obligations as fiduciaries are quite extensive. Even seasoned Investment Advisers may not fully understand their fiduciary obligations. Fiduciary duty encompasses much more than just the duty to be honest and avoid negligence. Advisers also owe an affirmative duty of loyalty, which means RIAs and […]
On March 3, 2021, the SEC’s Division of Examinations (Division) published its examination priorities for the year. These priorities are the driving force behind the Division’s examinations but are not exhaustive. Examiners may focus on other issues during an examination. The Division, which was previously called the Office of Compliance Inspections and Examinations, circulates its […]
The New York State Department of Law (the “Department”) recently adopted new regulations that went into effect on February 1, 2021. These new regulations govern the registration and examination requirements for investment adviser representatives domiciled in New York, or doing business with New York clients. Previously, New York did not require registration of state and […]
On February 4, 2021, the SEC charged three individuals and their affiliated entities with running an alleged Ponzi scheme that raised over $1.7 billion from securities issued by an asset management firm and Registered Investment Adviser (RIA). Approximately 4,000 of the 17,000 retail investors defrauded were seniors. According to the SEC’s complaint, the defendants told […]
Guest post by Ara Jabrayan On December 22, 2020, the SEC enacted the new Marketing Rule, which will have an enormous impact on Registered Investment Advisers (RIAs). The new rule will replace the prior Advertising Rule, as well as the Cash Solicitation Rule. The SEC also amended Form ADV and the Books and Records Rule […]
