In March 2018 the U.S. Securities and Exchange Commission (SEC) instituted an administrative cease-and-desist proceeding against an investment adviser firm in response to an alleged fraudulent “cherry-picking” scheme. The SEC asserts that from 2012-2015 the investment adviser firm disproportionately allocated profitable trades to a personal account, while disproportionately allocating unprofitable trades to client accounts. The firm, which had approximately $7.5-$9 million in assets under management, was fined $48,000 by its state securities regulator for failure to enforce its own supervisory procedures concerning trade allocation. Specifically, the state regulator found the investment adviser firm did not always pre-allocate block trades and did not retain a record of how block trades were pre-allocated. Click here to read the SEC’s full action.
SEC Compliance Outreach Program – Date Set for National Seminar
February 14, 2018
The U.S. Securities and Exchange Commission (SEC) recently announced that its Compliance Outreach Program National Seminar for investment adviser firms will be held on Thursday, April 12, 2018 in Washington, DC. This SEC event is designed to help chief compliance officer make improvements to his or her investment adviser firm’s compliance program. For an employee of an SEC registered investment adviser firm to attend in person, he or she can register online at https://regandsurvey.sec.gov/NoviSurvey/TakeSurveyPage.aspx?s=be9d4ac36e2c40e19efaef0ce7079d06&tsid=8ff8c4079869425ea960fd3130c3cdff&c=en-US . Additionally, the seminar will be broadcast live via the Internet which can be accessed at sec.gov .
Protecting Senior Investors
February 06, 2018
On Jan. 24, 2018 the United States House of Representatives passed the Senior Safe Act. The Senior Safe Act (referred to as “the Act,” formerly H.R. 3758) encourages financial services firms to train employees to spot elder abuse, while granting limited immunity to individuals at financial institutions who report such abuse to law enforcement or regulators in accordance with the Act.
NASAA Investment Adviser Coordinated Examinations Report
January 24, 2018
In September 2017, The North American Securities Administrators Association (NASAA) released its 2017 Investment Adviser Coordinated Examinations Report. NASAA’s report looked at 1,227 routine investment adviser examinations of state registered investment advisers. Once again, the area with the most deficiencies was books and records. Almost two out of every three investment advisers examined (64.6%) reported a deficiency in books and records retention.
RIA Compliance Consultants has released a new sample form, “Bank Referral Arrangement Disclosure Statement to Client.”
2018 Investment Adviser Conference
November 28, 2017
RIA Compliance Consultants will host its 2018 Investment Adviser Compliance Conference on August 22 and 23. Day 1 will consist of a half-day CCO training session with two tracks: one for advanced CCO’s and one for those just getting started. Day 2 will feature a series of informative presentations from our consultants on key topics in the world of investment adviser compliance. Early-bird registration for both days of the conference is available for the special price of $295.
Retirement Plan Rollover – Client Acknowledgement Sample Form Now Available with Bronze Package
November 27, 2017
We are pleased to announce that our sample form “Retirement Plan Rollover – Client Acknowledgement” is now available to clients in our Bronze Package – Annual Compliance Program Subscription.
Financial Exploitation of Elderly and Vulnerable Clients
September 06, 2017
An investment adviser firm and its investment adviser representatives are uniquely placed to spot signs of financial exploitation that may be happening to their investment advisory clients. An investment adviser representative is often on the front lines of a client’s finances and becomes quite familiar with a client’s habits, preferences, and personal situation. This knowledge can help the investment adviser representative spot unusual patterns and suspicious requests, whether made directly by the client or by a third party.
OMB Approves Request for DoL Fiduciary Rule Delay
August 31, 2017
The U.S. Office of Management and Budget (“OMB”) recently approved a request by the U.S. Department of Labor (“DoL”) that seeks to postpone implementation of the final portion of the DoL’s controversial fiduciary rule. Originally scheduled to go into effect January 1, 2018, this newest proposal by the DoL would see the fiduciary rule delayed eighteen more months, until July 1, 2019. Click here to view the regulatory review update on the OMB’s website.
On August 7, 2017, the Office of Compliance Inspections and Examinations (“OCIE”) of U.S. Securities and Exchange Commission (“SEC”) released a Risk Alert which details its examination of the cybersecurity preparedness of 75 broker-dealers, investment advisers and investment companies in the U.S. In comparison to prior cybersecurity examinations, this exam involved more active testing and validation of the firms’ procedures and controls related to cybersecurity. Click here to read the Risk Alert.
