On July 23, 2019 the Office of Compliance Inspections and Examination’s (“OCIE”) of the U.S. Securities and Exchange Commission (“SEC”) released a Risk Alert about its assessment of the oversight practices of SEC-registered investment advisers who employ or employed individuals with disciplinary histories. Of the over 50 advisers that were examined, nearly all of the examined advisers received deficiency letters. The OCIE exams did not focus solely on supervisory practices as they relate to the individuals with prior disciplinary histories. Instead, OCIE reviewed the advisers’ supervisory practices firm-wide. OCIE’s findings relate to all investment advisers regardless of whether they have someone with a disciplinary history. The deficiencies identified related to compliance and disclosure issues, including undisclosed conflicts of interest.
Category Archives: SEC
On June 5, 2019 the U.S. Securities and Exchange Commission (SEC) voted on and approved four rules relating to the proposed standards of conduct rulemaking package that was originally proposed in April 2018. The approved rulemaking package includes:
SEC Risk Alert – Compliance Issues Related to Regulation S-P – Privacy Notices and Safeguard Policies
May 07, 2019
On April 16, 2019, the United States Securities and Exchange Commission’s (SEC) Office of Compliance Inspections and Examinations (OCIE) issued a risk alert about “Compliance Issues Related to Regulation S-P – Privacy Notices and Safeguard Policies” to encourage investment adviser firms to review their written policies and procedures to, “ensure compliance with the relevant regulatory requirements.”
2019 SEC Examination Priorities
December 27, 2018
On December 20, 2018, the Office of Compliance Inspections and Examination (“OCIE”) of the U.S. Securities Exchange Commission (“SEC”) released its 2019 Examinations Priorities for SEC registered investment advisers. After completing over 3,150 investment adviser examinations in 2018, a 10 percent increase over 2017, the SEC outlined several themes for the focus of investment adviser examinations which include the following:
SEC Risk Alert – Electronic Messaging
December 19, 2018
December 17, 2018 the Office of Compliance Inspections and Examinations (“OCIE”) of the U.S. Securities and Exchange Commission (“SEC”) released a new National Exam Program Risk Alert Relating to Electronic Messaging. The purpose of the risk alert is to remind SEC registered investment advisers of their obligations when their supervised persons use electronic messaging and to help SEC registered investment advisers improve their systems, policies, and procedures by sharing the SEC staff’s observations from its investment adviser examinations.
Spreadsheet for Investment Adviser to Document that Authority to Initiate First-Party Transfer Between Different Custodians Doesn’t Constitute Custody
October 22, 2018
Does your federally registered investment adviser firm have authority to initiate first-party transfers between the client’s accounts at different qualified custodians?
SEC Fines Investment Adviser for Cybersecurity Failures
October 09, 2018
The United States Securities and Exchange Commission (SEC) has recently fined an Iowa-based investment adviser $1 million for alleged cybersecurity failures that led to a data breach that compromised the personal information of its clients. According to the SEC, information from over 5,600 of the investment adviser’s clients was obtained by criminals impersonating independent advisers. The SEC claims that the intruders gained access through weaknesses within the firm’s cybersecurity procedures. Some of these weaknesses had been exposed during previous fraudulent activity. The investment adviser allegedly failed to update and fix those issues.
SEC Settles Charges of Undisclosed Conflict in Advisory Decision
September 06, 2018
The U.S. Securities and Exchange Commission (“SEC”) recently announced that it has settled charges with an investment adviser firm. The SEC alleged that the investment adviser failed to disclose a conflict of interest. The settlement ended in payment of $8.9 million to the SEC by the investment adviser.
The U.S. Securities and Exchange Commission (“SEC”) released a package of new rule proposals in April of 2018. The SEC’s proposed rules and guidance can be found here.
