SEC Charges Stock Trader with Insider Trading WHAT HAPPENED? On December 11, 2017, the SEC charged a stock trader (“Defendant”) with generating over $1 million in illegal insider trading profits. Defendant collaborated with four former colleagues, posing as portfolio managers, to persuade investment bankers to share nonpublic information regarding [...]
SEC Modifies Final Rule for Form N-PORT WHAT HAPPENED? The SEC has adopted a temporary final rule that will delay the compliance dates for filing a Form N-PORT. The SEC made this modification in order to evaluate their data security practices for material, nonpublic information and uplift the EDGAR system [...]
Adviser Charged with Defrauding Clients WHAT HAPPENED? On December 11, 2017, the SEC charged a dually registered investment adviser and broker-dealer, and its principal (collectively, the “Defendant”), with defrauding its clients and receiving $780,000 in ill-gotten gains. Over the course of several years, Defendant repeatedly purchased securities from underwriters [...]
Division of Enforcement Releases Annual Report WHAT HAPPENED? On November 15, 2017, the SEC’s Division of Enforcement released its annual report for Fiscal Year 2017 (“FY 2017”). The report explains how the Division of Enforcement’s decision making throughout FY 2017 was guided by the following five principles: Focus on [...]
SEC Charges Unregistered Fund Manager WHAT HAPPENED? On October 26, 2017, the SEC charged an unregistered investment adviser and its principals (“collectively, the “Respondents”) with engaging a private fund it managed (the “Fund”) in conflicted transactions without providing disclosure to the investors. The conflicted transactions that Respondents performed includes [...]
SEC Grants Relief to Broker-Dealers and Investment Advisers WHAT HAPPENED? On October 26, 2017, the SEC released three no-action letters that will provide 30 months relief under the Investment Advisers Act of 1940 for US broker-dealers under the second Markets in Financial Instruments Directive (“MiFID II”). MiFID II is [...]
House Panel Passes Bill to Repeal DOL Fiduciary Rule WHAT HAPPENED? On October 12, 2017, the House Financial Services Committee passed the Protecting Advice for Small Savers Act of 2017 (the “PASS Act”), which would repeal the DOL’s Fiduciary Rule. This bill would keep fiduciary rulemaking under the SEC’s [...]
RIA Examinations Expected to Rise by 25% Over Next 2 Years WHAT HAPPENED? In a testimony to Congress, SEC Chairman Clayton stated that the SEC is on track to increase the number of registered investment adviser (“RIA”) examinations by 20 percent in fiscal year 2017 and by an additional [...]
SEC Spoofed Emails Used In Spear Phishing Attack WHAT HAPPENED? Cisco’s Talos Intelligence Group has identified a targeted cyber-attack focusing on specific organizations. The malware began with a targeted spear phishing email to initiate the malware and infected U.S. state government servers to further develop the malware infection chain. [...]
Reminder that the New Form ADV Rules Took Effect on October 1, 2017 WHAT HAPPENED? On October 1, 2017, the amendments to Part 1A of Form ADV and the Investment Advisers Act of 1940 (the “Advisers Act”) took effect. The amendments, which are described in a previous Flash Report, [...]