Compliance Solutions for Investment Advisers

Monthly Archives: January 2013

Compliance Challenged by Social Media Innovation

A steady stream of features being added to social media such as Facebook, Twitter and LinkedIn will test financial advisers’ ability to comply with securities law and company policy. LinkedIn’s endorsement feature could inadvertently put advisers in violation of regulations governing advertising in the securities industry, compliance experts say.

Mary Jo White

President Barack Obama has nominated former federal prosecutor Mary Jo White as chairman of the Securities and Exchange Commission. White, who is in private practice, was the first woman to serve as U.S. attorney for the Southern District of New York and also has been on the board of Nasdaq OMX Group.

SEC to Hold National Compliance Event for Broker-Dealers

The Securities and Exchange Commission today announced the opening of registration for its National Compliance Outreach Program for Broker-Dealers that will take place in Washington D.C. on April 9. The event is sponsored by the SEC’s Office of Compliance Inspections and Examinations in coordination with the SEC’s Division of Trading and Markets and the Financial


So what is cherry-picking?  The SEC gives a good description in a recent enforcement case (In the Matter of MiddleCove Capital, LLC and Noah L. Meyers): “Myers executed his cherry-picking scheme by unfairly allocating trades that had appreciated in value during the course of the day to his personal and business accounts and allocating trades

BDs Closer to Fiduciary Rule

The Securities and Exchange Commission plans to issue a “concept release,” which will also likely include a request for information, in the first quarter regarding its rule to put brokers under a fiduciary mandate.

SEC Adds Political-Disclosure Measure to its Agenda

The Securities and Exchange Commission says it hasn’t yet determined whether to propose a rule requiring firms to disclose their political activities, but proponents of such a rule say they’re increasingly confident the SEC will issue a recommendation. The rule was recently put on an April timeline, a move that observers say would be strange

As Long As You Disclose It . . .

Further proof that you can do just about anything as long as you disclose it first. Take the recent enforcement action “In the Matter of Ross Mandell (Initial Decision Release No. 478, January 3, 2013)”  The Findings of Fact section has this little gem: “The private placement memorandum (PPM) issued by the company to investors

Annual Entitlement Certification

Just a reminder that the annual super account administrator certification begins this coming Monday (Jan. 14th).

Enforcement Director Robert Khuzami to Leave SEC

The Securities and Exchange Commission today announced that Enforcement Director Robert Khuzami will leave the agency after nearly four years of leadership. During Mr. Khuzami’s tenure, the Enforcement Division filed scores of significant actions connected to the financial crisis and brought record numbers of cases involving insider trading and misconduct by investment advisers and investment

Compliance Alert! Compliance Resolutions (Part 2)

Dear Compliance Professional, Continuing on with our New Year’s compliance resolutions. . . Conduct a Risk Assessment It is clear from the recent trend of SEC examinations that regulators are sanctioning advisory firms that do not conduct an annual risk assessment.  A risk assessment involves identifying and prioritizing issues pertaining to an advisory firm’s operations

SEC Public Alerts, Reports and Letters

A really helpful list for investment advisers from the SEC Office of Compliance Inspections and Examinations.

A Few Compliance Tips

Read your firm’s E & O insurance to make sure it covers what you do in your advisory business. Have a whistleblower policy. Have a pay-to-play policy.

Enforcement vs Rulemaking

It is interesting that a significant number of the standards imposed on investment advisers today have been developed through the SEC’s institution of enforcement actions rather than through their rulemaking authority under the Advisers Act.

FINRA Invites Advisers to Utilize Arbitration

FINRA recently issued guidance stating that it will now accept requests for arbitration on a voluntary, case-by-case basis from investors and investment advisers, provided the parties meet certain conditions. Guidance on Disputes between Investors and Investment Advisers who are not FINRA-regulated firms

Compliance Alert! Compliance Resolutions (Part 1)

Dear Compliance Professional, As we start the new year, I think it appropriate that investment advisers add a few compliance-related resolutions to go along with the more typical “eat healthy, exercise more” resolutions we usually break by the second week of January.  Unlike our personal resolutions which are governed by moral opprobrium and enforced by