Compliance Solutions for Investment Advisers

Category Archives: Alert!

Alert – Insider Trading

The purpose of this Compliance Alert is to familiarize you with key insider trading concepts and issues. What is Insider Trading? The buying or selling of a security, in breach of a fiduciary duty or other relationship of trust and confidence, while in possession of material, nonpublic information about the security. Insider trading is the

SEC Exam Priorities – Cybersecurity

As part of its 2015 exam priorities, the Office of Compliance Inspections and Examinations (OCIE) cited their continued focus on cybersecurity issues. If you remember back, in April of 2014 OCIE issued a Risk Alert detailing its initiative to assess cybersecurity preparedness.  OCIE’s cybersecurity initiative was designed to assess cybersecurity preparedness in the securities industry and to

Alert – Information Security

The purpose of this compliance training material is to familiarize you with key issues regarding information security. Overview One of the most pressing compliance issues for investment advisers is how to satisfy SEC requirements in the area of information security. The following checklist will allow you to take measure of your advisory firm’s existing information

SEC Exam Priorities 2015

The SEC today announced its Office of Compliance Inspections and Examinations’ (commonly known as OCIE) priorities for 2015 which focus on three areas: protecting retail investors, especially those saving for or in retirement; assessing market-wide risks; and using data analytics to identify signs of potential illegal activity. Unlike in past years, the information for investment advisers

Alert – Social Media

A copy of the SEC Social Media Document Request Letter is reprinted below. Perhaps it is time to revisit your social media policies and procedures.  …………………. DOCUMENTS TO BE PRODUCED Please produce the following documents within Adviser’s possession or custody or subject to Adviser’s control for the period January 1, 2010 to the present: 1.

SEC Exam Initiative

Dear Compliance Professional, The SEC today announced that its Office of Compliance Inspections and Examinations (OCIE) is launching an initiative directed at investment advisers that have never been examined, focusing on those that have been registered with the SEC for three or more years.  OCIE previously announced that examining these advisers is a priority in 2014. As

SEC Exam Priorities – Update

Dear Compliance Professional, As part of its 2014 Exam priorities, the SEC announced that the “staff will utilize a number of strategies to conduct focused, risk-based examinations of the adviser population that has been registered for more than three years but has not yet been examined . . .” The SEC also announced that the

SEC Guidance on Reporting Financial Abuse of Older Adults

Seven federal regulatory agencies today issued guidance to clarify that the privacy provisions of the Gramm-Leach-Bliley Act generally permit financial institutions to report suspected elder financial abuse to appropriate authorities. The Gramm-Leach-Bliley Act generally requires that a financial institution notify consumers and give them an opportunity to opt out before providing nonpublic personal information to

SEC Risk Alert – Custody

The alert by the SEC’s Office of Compliance Inspections and Examinations (OCIE) comes after a review of recent examinations where significant deficiencies were identified showed custody-related issues in about one-third of the firms examined. The advisers’ deficiencies included: Failure to recognize that they have custody, such as situations where the adviser serves as trustee, is

Compliance Alert – SEC Exam Priorities

Dear Compliance Professional,   The National Examination Program (NEP) of the SEC’s Office of Compliance Inspections and Examinations recently released its examination priorities for 2013. The NEP release addresses both market-wide priorities and priorities for each of the NEP’s four distinct program areas: (i) investment advisers and investment companies; (ii) broker-dealers; (iii) clearing and transfer

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

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

Compliance Alert! Wire Fraud Scam

Dear Compliance Professional, We have just been notified by one of our clients of a wire fraud scam and wanted to bring it to your immediate attention. A cyber criminal created a fake client email message in an attempt to trick the adviser into wiring cash out of one of their client’s online investment accounts.

Compliance Alert! Performance Fees

Dear Compliance Professional, Recently the SEC tightened its rule on investment advisory performance fees by raising the net worth requirement for investors who pay performance fees and by excluding the value of the investor’s home from the net worth calculation. This follows on the heels of the SEC excluding the value of an investor’s home

Compliance Alert! Social Media

Dear Compliance Professional, Rarely do we see the SEC Office of Compliance Inspections and Examinations issue a National Examination Risk Alert. So when they do, we pay particular attention. Last week, OCIE issued just such a National Examination Risk Alert on Investment Adviser Use of Social Media. The key takeaways from this Risk Alert are:

Compliance Alert! Data Security

Dear Compliance Professional, The protection of a client’s non-public personal information is one of the most important tasks entrusted to an investment adviser. Unfortunately, it is also one of the most vexing issues confronting compliance professionals. Any time an adviser stores non-public personal information on a computer that is connected to the Internet, transmits such

Compliance Alert! Changes to ADV 1

Dear Compliance Professional, The adoption by the SEC of a series of rules intended to effectuate certain provisions of the Dodd-Frank Wall Street Reform Act has ushered in many significant changes for investment advisers. Some of those changes (e.g., the increased AUM threshold for SEC registration, the different scenarios for SEC registration, the new method

Compliance Alert! Disaster Recovery

Dear Compliance Professional, I hope this finds all of you and your families up and down the East Coast safe and sound. Earthquakes and hurricanes – two phenomena not usually associated with this neck of the woods (or Colorado, for that matter). As I sit here typing in semi-darkness – courtesy of Hurricane Irene –

Compliance Alert! Special Concerns

Dear Compliance Professional, The Compliance Alert below was originally sent out in 2008. Unfortunately, recent market events make the subject matter relevant once again. We will also be sending out other pertinent Compliance Alerts from 2008-2009. Background The purpose of this compliance training material is to alert advisory personnel to special compliance considerations that may

Compliance Alert! Performance Fees

Dear Compliance Professional, Dodd-Frank is certainly keeping us all busy. On July 12, 2011, the SEC issued an order adopting changes to the standard for charging clients a performance fee. Background The Advisers Act generally prohibits an investment adviser from entering into, extending, renewing, or performing any investment advisory contract that provides for performance compensation.