Category Archives: Enforcement

Compliance, Enforcement, Regulatory, Standard of Care

August Regulatory Updates

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From our friends at SEC3 , the August regulatory updates you need to know about:

  • More Flack on WhatsApp, Hypothetical Performance SmackDown, A Timely Warning on the Pay-to-Play Rule, and Updates to Qualifying Venture Capital Fund Exemption
  • 26 More Firms Slammed with $390 Million in Fines for Failure to Retain Texts and Chats
  • Adviser Ordered to Stop Using Hypothetical Performance on Public Website
  • Adviser Pays $95,000 Fine for Pay-to-Play Foot Fault in a Timely Reminder this Election Season
  • Venture Capital Funds Adjustment for Inflation

Read all about them here.

 

Compliance, Enforcement, International, Regulatory, Standard of Care

Celebrating the SEC at 90!

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Good people, important problems and workable laws – celebrating the SEC at 90!

On July 17, PLI hosted The SEC at 90: A Celebration and Retrospective in our New York Conference Center. The program, chaired by longtime Securities faculty Clifford Kirsch, featured SEC Commissioner Hester Peirce, author Diana Henriques (Taming the Street and The Wizard of Lies), former SEC Commissioners Robert J. Jackson, Jr. and Troy Paredes, and other expert panelists. Speakers discussed the SEC’s formation, challenges it faces, opportunities in the next 90 years and beyond, and where SEC practice has been, is, and will be.

Compliance, Enforcement, Regulatory, Standard of Care

New SEC Cybersecurity Incident rules for RIAs

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The SEC has just finalized rules requiring RIAs to adopt new measures for responding to cybersecurity incidents and notifying clients of such incidents.

RIAs and broker-dealers , among others, will now be required to develop, implement, and maintain written policies and procedures for an incident response program reasonably designed to detect, respond to, and recover from unauthorized access to or use of customer information.

The policies and procedures must address assessment of the situation, containment of the situation, and notification of affected clients.

Large advisers (i.e., those with at least $1.5 billion in assets under management) would need to comply with the new rules within 18 months of the publication of the final rules in the Federal Register while smaller advisers would need to comply within 24 months of such publication date.

Read more here.

Compliance, Enforcement, Regulatory

What’s the marketing piece that creates the most compliance risk for RIAs?

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In my opinion, it’s the website.

With the SEC’s scrutiny of Marketing Rule compliance, I believe the SEC is closely scrutinizing Forms ADV filed by RIAs, and to the extent that RIAs indicate they are referencing testimonials, endorsements, third-party ratings, predecessor performance, hypothetical performance, or specific investment recommendations in their marketing materials, this gives the SEC an impetus to review the adviser’s marketing materials.

The marketing piece most easily accessible to the SEC is the RIA’s website, the address to which is also listed on the Form ADV.

Read more here.