The SEC adjusted the definition of “qualified clients,” becoming effective on August 16, 2021, pursuant to the Dodd-Frank Act of 2010, requiring such an adjustment for inflation every five years. Investment Advisers Act of 1940 Section 205(a)(1) prohibits an RIA from charging a client a performance-based fee unless the client is a qualified client having a particular new work.
August Regulatory Updates from Cari Hopsfenperger at Hardin Compliance Consulting LLC.
Topics include:
From Brian Rubin and Jessica Rodgers in this month’s column for NSCP Currents:
This year marks the 35th Anniversary of the classic movie, The Princess Bride. According to the movie, the story is about:
Fencing. Fighting. Torture. Revenge. Giants. Monsters. Chases. Escapes. True love. Miracles.
In other words, many of the elements we regularly see in enforcement actions. “Inconceivable” as it may sound, we can make a case for all of them, with the possible exception of “True love.” (Although, let’s be honest, who among us doesn’t love a cleverly drafted legal argument or a well-written Form ADV?)
Read more here. As you wish. . . .
On June 23, 2021, the U.S. Securities and Exchange Commission (the “Commission”) entered an administrative order (the “Order”) that, among other things, fined a broker-dealer (“BD”) $208,912 for alleged violations of Rule 21F-17(a), which relates to individuals reporting possible securities laws violations to the Commission (a.k.a., whistleblowers).
Practice Tip: While the Order was entered against a broker-dealer, Rule 21F-17(a) applies to all entities subject to the Commission’s jurisdiction (e.g., public companies, broker-dealers, and investment managers). Indeed, the Commission has previously sanctioned public companies and investment advisers for violations of Rule 21F-17(a).
Read more here for both a summary of the Order’s findings, and take-aways for legal and compliance practitioners who support firms that are subject to the Commission’s jurisdiction.
Reuters reported today that the SEC is investigating last year’s hack of SolarWinds, focusing on whether SEC registrants failed to disclose that they had been impacted by the cyber breach.[1] According to the article, the SEC sent voluntary requests for information to “a number of public issuers and investment firms…” The SEC is reportedly investigating whether SolarWinds customers had been victims of the hack and failed to adequately disclose that fact.