“RIAs Pay the Price for False Performance Claims
Delray Beach, Fl – October, 2016 – On August 25, 2016, the SEC announced penalties against thirteen Registered Investment Advisers (“RIAs”) that violated securities laws by disseminating false performance claims made by F-Squared Investments, an investment management firm. The SEC conducted an enforcement sweep of RIAs and found that these thirteen firms did not question F-Squared’s claims that its AlphaSector strategy had outperformed the S&P 500 index for a number of years. The firms passed along the performance claims made by F-Squared to investors without substantiating the results. (more.
“Over-exaggeration” and Other Advertising Compliance Problems
Delray Beach, Fl – September, 2016 – An Olympic swimmer recently admitted that he “over-exaggerated” his story about being robbed after a night of celebration in Rio. “Over-exaggeration,” or any exaggeration for that matter, is just one of many misstatements that can cause an investment adviser’s advertisements to be noncompliant. (more.
Form ADV Disclosure Deficiencies Mislead Investors and Regulators
Delray Beach, Fl – August, 2016 – The Form ADV Part 2 disclosure brochure is a narrative that must be written in plain English. The disclosure brochure describes a firm’s advisory services, compensation, experience, conflicts of interest, investment strategy, and a wealth of other important information. Recent enforcement actions demonstrate that the SEC will sanction Registered Investment Advisers (“RIAs”) that fail to make full and accurate disclosure in their firms’ Form ADV. (more.
Inaccurate Fee Calculations Will Be Costly for RIAs
Delray Beach, Fl – July, 2016 – The late New York Yankee legend, Yogi Berra, said that “baseball is 90 percent mental, and the other half is physical.” Registered Investment Advisers (“RIAs”) are required to be much more precise with their calculations, especially in regard to advisory fees. Miscalculating those fees is likely to cause problems with clients and examiners. (more.
SEC Sends Clear Message That Cybersecurity Is Still a High Priority
Delray Beach, Fl – June, 2016 – Recent speeches and public statements made by SEC officials indicate that the Commission is still focused on cybersecurity. Registered Investment Advisers (“RIAs”) and broker-dealers would be wise to take note of those pronouncements and should make certain they are using their best efforts to defend their firms against cyber-attacks. (more.
A Cautionary Look at Regulation Crowdfunding
Delray Beach, Fl – May, 2016 – Issuers are often bewildered by the myriad “Dos” and Don’ts” of raising equity capital for their young firms. Their attention span does not last far into an explanation of the rules and how and why they came about. Often the first mention of the ’33 Act loses their interest. Title III of the JOBS Act required the SEC to come up with a solution to allow issuers and investors to come together under less onerous and modern terms. The SEC’s answer is Regulation CF. (more.
Solicit Compliance Advice Before Using Solicitors
Delray Beach, Fl – May 2016 – As Registered Investment Advisers (“RIAs”) attempt to grow their business, they often consider whether to use solicitors. RIAs should be aware of the compliance obligations they will face if they choose to use solicitors. These compliance requirements are dependent upon where the RIA and the solicitor are located, as well as the particular facts and circumstances surrounding their relationship. (more.
DOL’s Fiduciary Rule is Finalized
Delray Beach, Fl – Apr. 2016 – The final version of the Department of Labor’s fiduciary rule was released on April 6, 2016. According to Labor Secretary Thomas Perez, the final version of the 1,028 – page rule was streamlined. Though the final version of the fiduciary rule was revised in response to industry concerns, it is still likely to have a dramatic impact on Registered Investment Advisers (“RIAs”), broker – dealers, insurance agents, and financial institutions. (more…
Share Class Choices Can Breach Duty of Best Execution
Delray Beach, Fl – Mar. 2016 – On January 14, 2016, the SEC announced that it had settled an enforcement action against an Ohio-based Registered Investment Adviser (“RIA”) and two of its officers who were licensed registered representatives of a broker-dealer. The SEC alleged that the RIA violated sections 204, 206(2), 206(4) and 207 of the Investment Advisers Act, as well as Rules 204(a), 204-3(b)(1) and (2), and 206(4)-7 thereunder. The RIA’s president and majority owner, as well as its Chief Operating Officer and minority owner, were accused of violating or causing these violations of the Investment Advisers Act and its rules. (more…
SEC’s 2016 Examination Priorities
Delray Beach, Fl – Feb. 2016 – The SEC’s Office of Compliance Inspections and Examinations (“OCIE”) revealed its 2016 examination priorities on January 11, 2016. These examination priorities affect a number of financial institutions, including Registered Investment Advisers (“RIAs”), broker-dealers, transfer agents, and clearing agencies. (more…
Compliance Resolutions for the New Year
Delray Beach, Fl – Jan. 2016 – The new year is a perfect time for resolutions and not just the standard pledge to lose weight or exercise more. Chief Compliance Officers (“CCOs”) should consider making resolutions that will help their firms to stay compliant. (more…
Knowledgeable, Ethical, and Conscientious CCOs Can Protect Themselves and Their Firms
Delray Beach, Fl – Dec. 2015 – The SEC and other securities regulators know they cannot catch every noncompliant activity that might harm investors. Enforcement actions help securities regulators send a message to Registered Investment Advisers (“RIAs”), Chief Compliance Officers (“CCOs”), and Broker-Dealers (“BDs”) that noncompliance and recidivist violations will not be tolerated.(More…
November 9, 2015
Risk Alert reveals the SEC’s staff observations regarding effective outsourced CCOs
Washington, D.C. – Nov. 9, 2015 – NCS and Regulatory Compliance employ a comprehensive compliance process with Outsourced CCO clients, including frequent communication and onsite visits, which are designed to address the SEC staff observations regarding effective outsourced CCOs. Read the entire alert (more…
November 4, 2015
Andrew Ceresney of the SEC Enforcement Division gives keynote address at recent NSCP conference
Washington, D.C. – Nov. 4, 2015 – NCS and Regulatory Compliance exhibited and spoke at the recent 2015 NSCP conference where Director, Division of Enforcement for the SEC, Andrew Ceresney, gave a keynote address discussing the Enforcement’s perspective on compliance officers and how enforcement cases that touch compliance personnel are approached. (more…
October 27, 2015
National Compliance Services and Regulatory Compliance join forces to form full-service compliance consulting powerhouse
New York – Oct. 27, 2015 – National Compliance Services Inc. (NCS) and Regulatory Compliance LLC, two of the nation’s longest-serving regulatory compliance consulting leaders (more…