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SEC Exam Priorities – Cybersecurity

posted in: Alert!, SEC Examinations | 0

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

3 Types of Compliance Testing

posted in: Compliance | 0

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

Marketing Review Checklist

posted in: Advertising & Marketing | 0

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

The Annual Review Process Part 2 – The Methodology

posted in: Compliance | 0

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

Annual Review Process – The Goals

posted in: Compliance | 0

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

Soft Dollar Violations

posted in: Brokerage Practices | 0

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

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

Conflicts of Interest

posted in: Compliance | 0

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

Risk Assessment Process

posted in: Compliance, SEC Examinations | 0

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

No Action Letters & Enforcement Actions

posted in: Compliance | 0

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

Compliance Training

posted in: Compliance | 0

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

What is Compliance

posted in: Compliance | 0

Because sometimes we forget, here is an excellent description from an interview with Odell Guyton of Jabil, Inc. in the Wall Street Journal. Mr. Jabil is also a co-founder and board member of the Society for Corporate Compliance and Ethics. Compliance … Continued

SEC Exam Priorities 2015

posted in: Alert! | 0

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 … Continued

Quarterly Transaction Reports

posted in: Code of Ethics | 0

All Access Persons must submit personal securities transaction reports no later than thirty (30) days after the end of each calendar quarter. The information contained in the Transactions Report must cover all transactions made by the Access Person during that … Continued

Disclosure Basics

Beyond lack of disclosures, beyond incomplete disclosures and even beyond failure to disclose conflicts of interest, the most problematic disclosure issue is when there are discrepancies between an adviser’s disclosure documents. Examiners take an especially harsh view of investment advisers that fail to reconcile their … Continued

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