Compliance Manual Pitfalls

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Remember that whispered voice in Field of Dreams. . . “If you build it, he will come?” Well, the SEC has its own version .  .  . “if you put it in your manual, we will make you prove you … Continued

2019 SEC Examination Priorities

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The Office of Compliance Inspections and Examinations (OCIE) of the U.S. Securities and Exchange Commission has released its 2019 examination priorities. You will not be surprised to see that cybersecurity is still on the list. Anti-money laundering will also figure … Continued

3 Ways to Reduce Potential SEC Penalties

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One day you might find yourself in a situation where you have discovered – through the normal operation of your compliance policies and procedures or through your compliance testing – that your advisory firm has come up short in some significant manner. … Continued

SEC 2017 Examination Priorities

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The SEC’s Office of Compliance Inspections and Examinations has published its examination priorities for 2017. The priorities focus on electronic investment advice, money market funds, and financial exploitation of senior investors. In addition, the priorities “reflect a continuing focus on … Continued

Undisclosed Compensation Arrangements

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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

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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

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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

SEC Exam Priorities – Cybersecurity

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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. … Continued

Cherry-Picking

I was reviewing some of the more interesting and relevant SEC Enforcement cases and came across the cherry-picking scheme of J.S. Oliver Capital Management, a San Diego-based investment adviser, and its President, Ian Mausner. According to the SEC complaint, they engaged … Continued

Risk Assessment Process

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Dear Compliance Professional, As part of the examination process, the SEC meets with senior management to discuss how each advisory firm identifies and mitigates conflicts of interest and legal, compliance, financial, and operational risks. This initiative is designed to: (i) … Continued

SEC Exam Initiative

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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 … Continued

SEC Exam Priorities – Update

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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 … Continued