The SEC’s website specifically lists “Form ADV Disclosures” as a risk that may be present as part of an investment adviser’s everyday operations. Some of the specific risks listed are: Inaccurate, omitted, or unclear disclosures; Out of date disclosures; Misrepresentation … Continued
In a recent speech an SEC official said that the presence of robust, effective compliance programs would allow companies to reap significant credit in their dealings with regulators. He spoke about the ways the SEC supports compliance and ethics programs. … Continued
Investment advisers have a fiduciary duty to act in the best interests of their clients. A central tenant of this duty is full and fair disclosure of all material facts to clients. So what you tell your clients about your … Continued
Applicants for investment adviser registration should not only be concerned about the accuracy of their firm’s primary registration documents (i.e., Form ADV Part 1 and Part 2A), but also that these documents, along with the firm’s advisory agreements, are consistent … Continued
With the proliferation of smart phones, iPads and table computers in the advisory business, I would suggest that all advisers probably would benefit from developing and implementing policies and procedures regarding their use. Here are some issues you should consider: … Continued
Are you really at the same weight you were in 2003? You would be positively amazed at how quickly the information on the Form U-4 can become outdated. Why? Because unlike the ADV 1, you can renew an investment adviser … Continued
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
Transactional Tests Transactional tests (also known as quality control tests) are compliance tests that are conducted contemporaneously with the activity in question and are used to detect deviations of actual transactions from firm policies or regulatory standards. Examples of transactional … Continued
Advertising and marketing will always be a primary area of concern for regulators. Underscoring this is the SEC most recent Presence Exams Letter which listed “Marketing” as its first substantive subject. That letter stated that the Office of Compliance Inspections … Continued
Make sure your compliance program and its implementation are up to par; Know if you have custody and make sure you have satisfied any attendant requirements; Conduct a through risk assessment; Establish a culture of compliance at the top of … Continued
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. … Continued
Dear Compliance Professional, In the first installment of this series on the annual review process, we learned that the primary goals of the annual review are to determine the adequacy and effectiveness of your policies and procedures in light of your firm’s businesses, advisory services, … Continued
Dear Compliance Professional, Advisers Act Rule 206(4)-7 (commonly referred to as the Compliance Rule) requires SEC-registered investment advisers to conduct an annual review of the adequacy and effectiveness of their policies and procedures. Many states have also, either expressly or implicitly, … Continued
Regulatory examiners always look for inconsistencies between an advisory firm’s Form ADV Part 1 and Part 2. In fact, inconsistencies between these documents is one of the leading deficiencies found by SEC and state examiners during a regulatory audit. The … Continued
Back to the SEC administrative action against J.S. Oliver Capital Management and its President, Ian Mausner. Not only were they involved in a Cherry-Picking scheme (see my January 28, 2015 post), but the SEC has alleged that they also misused soft … Continued
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
As part of the examination process, the SEC will meet with senior management to discuss how each firm identifies and mitigates conflicts of interest and legal, compliance, financial, and operational risks. This initiative is designed to: (i) evaluate firms’ control … Continued
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
On odd pairing indeed. But more closely related than you think. No-Action Letters let advisers know what actions under what specific circumstances are permitted. Enforcement actions let advisers know what actions under what specific circumstances are NOT permitted. Both are … Continued
Dear Compliance Professional, One of the best ways an investment adviser can show regulators that they have instilled a strong culture of compliance is through compliance training. And yet, based on the number inquiries we receive on the topic, advisers … Continued
