On March 11, 2019, the SEC announced settlements with 79 investment advisers who self-reported violations of the Investment Advisers Act of 1940 (the “Advisers Act”) in connection with the Division of Enforcement’s Share Class Selection Disclosure Initiative (the “Share Class
IM Insights
Providing securities and derivatives regulatory updates for investment management industry participants
IM Insights, published by Morrison & Foerster LLP, focuses on regulatory and compliance issues affecting financial services and investment management sectors. The blog covers topics such as SEC regulations, FINRA guidance, fund of funds rules, valuation practices for registered investment companies, and implementation of regulations like Regulation Best Interest and Form CRS. It provides updates on enforcement trends, compliance best practices, and legal developments relevant to broker-dealers, investment advisers, and fund managers. The content aims to assist industry participants in navigating complex regulatory frameworks and addressing operational risks associated with securities laws and investment company regulations.
Latest from IM Insights - Page 3
The SEC Continues to Spread Sunshine on Private Equity: Reflections on Two Recent Enforcement Actions
The end of 2018 was notable for two SEC enforcement actions against private equity fund managers for violations of the Investment Advisers Act of 1940 arising from improper allocations of expenses, undisclosed conflicts of interest, and insufficient compliance policies and…
FINRA’s 2019 Risk Monitoring and Examination Priorities Letter Highlights Broker-Dealer Online Distribution Platform Activities
FINRA recently published its 2019 Risk Monitoring and Examination Priorities Letter (“Priorities Letter”) highlighting topics upon which FINRA will focus in the coming year. Unlike letters in prior years, the Priorities Letter focuses primarily on areas that FINRA considers to…
Beware of Texting While Advising: OCIE Issues an Electronic Messaging Risk Alert
In December 2018, the Securities and Exchange Commission’s Office of Compliance Inspections and Examinations (OCIE) published its fifth and last risk alert of 2018 on the topic of electronic messaging by personnel of registered investment advisers. In the alert, OCIE…
OCIE Publishes 2019 Enforcement Priorities
By Kelley Howes
The SEC’s Office of Compliance Inspections and Examinations (OCIE) published its 2019 examination priorities on December 20, 2018. Although OCIE’s published priorities “provide a preview of key areas where OCIE intends to focus its limited resources,” registrants should be aware that…
First SEC Enforcement Action Against Unregistered Digital Token Exchange
Until yesterday, the enforcement actions of the U.S. Securities and Exchange Commission (SEC) in the digital token (aka cryptocurrency) space have primarily focused on the primary issuances of tokens. However, on November 8, 2018, the SEC announced in an order…
SEC Staff Allows Fund Boards to Rely on CCO Reports
By Kelley Howes
On October 12, 2018, the staff of the SEC’s Division of Investment Management issued a no-action letter to the Independent Directors Council (“IDC”) agreeing that the staff will not recommend enforcement if, in lieu of making certain determinations under Rule 10f-3, 17a-7…
SEC Sanctions Adviser and Portfolio Manager for Improper Cross Trades and Failure to Seek Best Execution
In a recently settled enforcement matter, the SEC imposed a $1 million penalty on an investment adviser based on findings that the adviser violated the Investment Advisers Act of 1940 (the “Advisers Act”) and caused violations of the Investment Company Act…
Broker-Dealer Settles Record Keeping Charges for $1.25 Million
By Kelley Howes
On July 17, 2018, the SEC announced that it had entered into a settlement with a broker-dealer charged with failure to preserve certain records and inaccurately recording travel, entertainment, and other expenses. The broker-dealer agreed to pay a $1.25 million penalty…
OCIE Risk Alert Identifies Common Best Execution Deficiencies
On July 11, 2018, the SEC’s Office of Compliance Inspections and Examinations (OCIE) published a Risk Alert identifying the most common deficiencies that its staff observed in recent examinations of registered investment advisers’ best execution practices. As with prior OCIE Risk Alerts,…