Undisclosed Compensation Arrangements

posted in: SEC Examinations | 0

Such arrangements may include, among others, undisclosed solicitation arrangements. It is not uncommon to have a discussion with a client about whether they can pay a certain person for client referrals. Often they cannot because the person is not qualified … Continued

An Ounce of (Compliance) Prevention

posted in: Compliance, SEC Examinations | 0

The enforcement staff gives credit to registrants that demonstrate effective compliance programs and a genuine commitment to ethical principles.  Advisers should focus on persuading the enforcement staff of the quality and depth of a firm’s compliance culture and its record … Continued

5 Exam Focus Areas for New Advisers

posted in: SEC Examinations | 0

The SEC has been engaging in shorter, more streamlined “presence exams” for newly registered advisers.  The following five focus areas make up the bulk of these exams: Marketing; Portfolio management; Conflicts of interest; Safety of client assets; and Valuation.  Streamlined … Continued

Don’t Exaggerate AUM

posted in: Registration & Licensing | 0

Assets under management is a defined term on Form ADV. Don’t exaggerate to stay registered with the SEC. The SEC has enforcement actions underway against multiple SEC-registered advisory firms that puffed up their assets.