Privacy Risks and Best Practices for an Investment Adviser Using ChatGPT

September 24, 2023

Introduction

In the age of artificial intelligence and machine learning, the use of large language models like ChatGPT presents both opportunities and compliance challenges for investment adviser firms. This post aims to discuss at least one risk associated with an investment adviser firm’s supervised persons using the consumer version of ChatGPT, specifically focusing on the potential for an investment adviser to share inadvertently non-public personal information (“NPPI”) of clients and several best practices for mitigating this privacy risk.

Summary of SEC’s Finalized Private Fund Adviser Rules

September 19, 2023

Regulatory Alert

The United States Securities and Exchange Commission (“SEC”) recently issued a final set of rule amendments under the Investment Advisers Act of 1940, primarily aimed at enhancing the regulatory framework governing investment advisers to private funds. The new set of rules, as described in SEC Release No. IA-6383, is designed to protect investors who invest directly or indirectly in private funds. It focuses on increasing transparency in compensation arrangements and prohibiting conflicted arrangements involving private funds. Through an audited financial statement requirement, the new rules also aim to prevent fraudulent activities by registered investment advisers advising private funds. Finally, this set of new rules includes an amendment requiring all SEC-registered investment advisers to document in writing the annual review of their compliance policies and procedures.

SEC Fines Investment Adviser for Failure to File Form 13F

September 18, 2023

Introduction

The United States Securities and Exchange Commission (“SEC”) has initiated an administrative enforcement proceeding against an investment adviser firm registered with the SEC for allegedly failing to file the quarterly Form13F from February 2017 until April 2022.

Key Takeaways from NASAA’s 2023 Investment Adviser Coordinated Exam

September 15, 2023

Introduction

The North American Securities Administrators Association (“NASAA”) recently released its 2023 Investment Adviser Coordinated Exam findings. The report provides valuable insights and empirical data with respect to the most common deficiencies found during 683 routine examinations of state-registered investment advisers located throughout the U.S. and conducted from January 1 to July 31, 2023.

The SEC’s Crackdown on Whistleblower Retaliation: What Investment Adviser Firms Need to Know

September 09, 2023

In the ever-evolving landscape of securities regulation, it is crucial for investment adviser firms registered with the United States Securities and Exchange Commission (“SEC”) to stay vigilant and informed about current enforcement actions. A recent cease-and-desist proceeding instituted by the SEC against a clean energy company has sent a clear message regarding whistleblower protections and the use of severance agreements. As a result, we’ll explore the implications of this enforcement action and how it relates to investment adviser firms in light of SEC Rule 21F-17.

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