The Texas Securities Commissioner recently entered into a consent order with an investment adviser representative (also referred to as an “IAR”) related to his performance fee arrangement and trading practices.
Investment adviser firms advising plan participants on IRA rollovers should review the recently published guidance of the U.S. Department of Labor (“DoL”) regarding PTE 2020-02, a new fiduciary advice prohibited transaction exemption. Compliance with PTE 2020-02 now permits investment advisers to provide advice regarding IRA rollovers without violating Title I of the Employee Retirement Income Security Act of 1974, as amended (ERISA), and the Internal Revenue Code of 1986 (“IRC”), both of which prohibit investment advisers from receiving payments that create a conflict of interest when providing fiduciary investment advice to plan sponsors, plan participants, and IRA owners. The adoption of PTE 2020-02 follows several years of rulemaking, court actions, and DoL guidance regarding the definition of fiduciary investment advice and clarifies that advice regarding IRA rollovers is considered a fiduciary activity, in contrast to the DoL’s prior interpretation.
SEC Brings Enforcement Action Against RIA for Allegedly Failing to Disclose Adverse Info About Promissory Notes Issuer
February 07, 2021
The U.S. Securities and Exchange Commission (“SEC”) recently instituted a cease-and-desist proceeding against an SEC registered investment adviser firm and its principal for failure to disclose material information to a client regarding promissory notes issued by a third-party, which eventually was charged in June 2018 by the SEC with an offering fraud and placed under receivership in December 2018. Click here to view the SEC order in this matter; the following is a summary of the SEC’s allegations in this matter, RIA Compliance Consultants, Inc. has not verified the accuracy of such allegations.
The U.S. Securities and Exchange Commission (“SEC”) recently provided guidance on the disclosure obligations of an investment adviser firm when receiving a Paycheck Protection Plan (“PPP”) loan guaranteed by the U.S. Small Business Administration in conjunction with the relief afforded from the CARES Act during the COVID-19 pandemic.
Learn How Your Investment Adviser Can Improve Its Report of Elder Abuse to Adult Protective Services
January 20, 2020
Many state legislatures in the U.S. have recently passed legislation mandating that investment adviser firms and their supervised persons report instances of elder abuse by third parties to the applicable authority in the state (e.g., adult protective service, attorney general’s office). Moreover, many securities regulators have passed specific rules requiring mandatory reporting of elder abuse and/or taken the position that reporting instances of elder abuse is essentially part of an investment adviser firm’s fiduciary duty to act in a client’s best interest.
November 11, 2019
Join RCC President, Bryan Hill, on Thursday, November 14 at 12:00 PM CT as he expertly presents on an Investment Adviser’s Fiduciary Duty. Under federal law, an investment adviser is a fiduciary and must act in the best interest of its clients at all times. This fiduciary duty requires an investment adviser to provide advice that is in the best interest of the client, based on the client’s objectives, and eliminate or make full and fair disclosure of all conflicts of interest that might incline and investment adviser – consciously or unconsciously – to render advice which is not disinterested.
On July 1, 2019 the United States Securities and Exchange Commission (“SEC”) filed an order instituting administrative cease-and-desist proceedings to an investment adviser firm for allegedly failing to disclose material conflicts of interest.
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.
August 11, 2017
The United States Department of Labor (“DoL”) indicated in a court filing yesterday, August 9, 2017, that it would be seeking an eighteen-month delay in implementing the second phase of the fiduciary rule. This phase, originally scheduled to go into effect on January 1, 2018, would require investment advisers who receive variable compensation to comply with the Best Interest Contract Exemption (“BICE”). A signature feature of the Fiduciary Rule, BICE permits investment advisers to receive variable compensation only if they sign a contract with clients promising to put the clients’ interest before their own. The second phase also implements exemptions for principal transactions and insurance agents.
Dale Brown, President and CEO of the Financial Services Institute (“FSI”), wrote a letter to Representative John Kline, (R – MN) Chairman of the U.S. House Education and Workforce Committee and to ranking member George Miller, (D – CA) in response to comments made by Phyllis Borzi, Assistant Secretary of the Department of Labor, (“DOL”) in a letter to the same members of the Committee. Borzi told the ranking members she was disappointed with the lack of participation in the DOL’s request for data as part of its “effort to expand the definition of fiduciary under the Employee Retirement Income Security Act of 1974 (“ERISA”).”In Brown’s letter he is critical of DOL Assistant Secretary Borzi for what he calls an impractical request.