Wrap Fee Program Compliance Risks: The SEC’s Latest Guidance WHAT HAPPENED? The SEC recently released a Risk Alert outlining common compliance concerns among advisers’ wrap fee programs. This type of compensation arrangement carries unique risk because the flat fee structure may incentivize advisers to trade wrap accounts less frequently. [...]
The SEC’s Latest Exam and Request List Trends WHAT HAPPENED? With new SEC leadership in place, including Chairman Gary Gensler and Director of Enforcement Gurbir Grewal, the Commission’s examination trends continue to evolve. Some focus areas, like cybersecurity and business continuity, are more relevant than ever with the changes [...]
SEC Cybersecurity Sweep Exams? Here is what you need to know. WHAT HAPPENED? Recently, there has been an increase in SEC Exam requests related to cybersecurity. Although the SEC has not yet announced a sweep exam, there appears to be a cybersecurity exam initiative underway. This is likely due [...]
SEC Appoints New Director of Enforcement, Gurbir S. Grewal WHAT HAPPENED? On June 29, 2021, the SEC issued a press release announcing the appointment of New Jersey Attorney General, Gurbir S. Grewal, as the Commission’s new Director of Enforcement. The announcement follows the appointment and sudden departure of Alex [...]
Inaccurate Performance Information Leads to SEC Charges WHAT HAPPENED? The SEC recently settled with a registered investment adviser that posted false statements and misleading performance data on its public website. The adviser also had referral relationships with bloggers but did not make required investor disclosures about these connections. The [...]
The SEC’s Bitcoin Futures Warning WHAT HAPPENED? Last week, the SEC released a statement pertaining to funds investing in Bitcoin futures. Market participants have pushed for cryptocurrency ETFs in recent years, with no sign the SEC will approve these products in the near future. Instead, the Commission continues to [...]
Adviser Facing Jury Trial for Securities Laws Violations WHAT HAPPENED? An exempt reporting adviser (“ERA”) and related private fund were recently investigated by the SEC for a variety of securities laws violations, including misappropriation of funds, making material misstatements, and failing to disclose conflicts of interest, among other infractions. [...]
SEC Director of Enforcement Resigns After One Week – What Now? WHAT HAPPENED? Last month, the SEC announced Chairman Gary Gensler appointed Alex Oh to be Director of the Division of Enforcement. Just days later, Oh resigned from her position, the SEC initially citing “personal reasons” as the cause [...]
Key Takeaways from the SEC’s ESG Risk Alert WHAT HAPPENED? Recently, the U.S. Securities and Exchange Commission released a Risk Alert outlining specific compliance concerns associated with environmental, social, and governance (ESG) investing. With these investment products increasing in popularity across capital markets, the SEC is expanding efforts to [...]
Misleading Investor Newsletters: Firm Principal Charged by SEC for Omitting Facts WHAT HAPPENED? The owner and principal of an Indiana-based investment advisory firm was recently fined by the U.S. Securities and Exchange Commission for knowingly misleading private fund investors. The violations took place throughout 2017 when the firm’s principal [...]