Category Archives: Solicitors

SEC Brings Enforcement Action Against Investment Adviser For Paying Online Content Creators to Solicit Clients

August 27, 2023

Regulatory Alert


The United States Securities and Exchange Commission (“SEC”) recently announced an enforcement action against and settlement with an investment adviser firm related to solicitation arrangements with online content providers. The investment adviser firm allegedly paid over $8 million to more than 200 social media influencers and online newsletter providers for prospective client referrals without adhering to the required disclosure and documentation under the former Rule 206(4)-3 of the Investment Advisers Act of 1940. The investment adviser firm has agreed to a cease-and-desist order, censure, and a $250,000 civil penalty to settle the charges by the SEC.

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SEC Adopts New Marketing Rule for Investment Adviser Advertising and Solicitation

January 12, 2021

On December 22, 2020, the U.S. Securities and Exchange Commission (“SEC”) announced it has adopted amendments (also known as the “marketing rule”) to its rules under the Investment Advisers Act of 1940 (“Advisers Act”) that govern advertising and cash solicitation activities by investment advisers registered with the SEC. Unlike the proposed amendments, the SEC’s finalized marketing rule addresses both advertising and soliciting under a single rule. Click here to read the SEC’s final rule release for this new marketing rule for investment advisers.

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NASAA Proposes Model Rule Regarding Solicitors for Registered Investment Advisors

September 08, 2009

The Investment Adviser Regulatory Policy and Review Project Group of the North American Securities Administrators Association (known as “NASAA” and essentially consisting of state securities regulators) recently solicited comments from the public on a proposed model rule regarding solicitors for registered investment advisors. The comment period ended in August and NASAA has not yet released a final version of the model rule. According to NASAA’s website, the model rule “is necessary and appropriate to facilitate the regulation of solicitor activity for the benefit of investors, to promote uniformity among the states and between states and federal rules, and to provide guidance to the industry.”

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Licensing of Solicitors as Investment Advisor Representatives Required by Most State Securities Regulators

August 10, 2009

Did you know that most state securities regulators require paid solicitors of registered investment advisor firms to license as investment advisor representatives? This means that the solicitor must either establish his/her own registered investment advisor or license under an existing registered investment advisor. From the solicitor’s perspective it is far easier to simply license under an existing registered investment advisor rather than forming a new registered investment advisor. However, what does that mean for the existing registered investment advisor holding the solicitor’s investment advisor representative license?

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New Hampshire Waives the Series 65 Exam Requirement for Solicitors

September 03, 2007

Under House Bill 889, the State of New Hampshire recently amended its Uniform Securities Act (RSA 421-B:2) to exempt an individual, who is an investment adviser or investment adviser representative and conducting investment advisory business solely as a solicitor, from the Series 65 examination requirement.

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California Proposes Amendments to Rules under the Corporate Securities Law of 1968

August 30, 2007

Earlier this month, the California Department of Corporations announced proposed changes to rules regulating investment advisers registered in California. According to the release, the objective in proposing the amendments is to increase uniformity with the model rules suggested by the North American Securities Administrators Association (NASAA), rules already in effect in other states, and rules established by the Securities and Exchange Commission (SEC). California is giving the public an opportunity to comment on the proposed changes. The time period for comment ends on October 30, 2007.

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