From our friends at FiSolve, the SEC charged a State of Minnesota-registered investment adviser, and its owner with cherry-picking by disproportionally allocating profitable trades to accounts belonging to the owner and his relatives, while allocating unprofitable trades to other advisory clients. The owner consented to an industry bar, and the firm and owner consented to certain remedial measures, including the payment of civil penalties and disgorgement. The adviser was also censured. Read more here.
Top Compliance Program Mistakes (and How to Avoid Them)
Chief Compliance Officers face the challenge of running a comprehensive yet efficient compliance program that nimbly adapts to changing regulatory requirements and business practices. To assist you, our friends at SEC3 have put together a three-part series to discuss common compliance program mistakes investment advisers make and how to avoid them.
SEC Delivers its Enforcement Report, Industry Says Goodbye to SEC Chair Gensler, and Lessons on Third-Party Transfers and Cherry-Picking
From our friends at SEC3, their December Regulatory Roundup, where they provide practical advice on the latest regulatory headlines. They start this issue with the SEC’s 2024 enforcement results, which fell somewhat short after its 2023 banner year. They also say goodbye to SEC Chair Gary Gensler, who tendered his resignation after Donald J. Trump won his presidential bid. Given the president-elect’s views on government, I expect the next chair to have a less aggressive regulatory agenda. For firms following the ongoing drama in the Fifth Circuit Court of Appeals about the Corporate Transparency Act, the current answer as of December 26 is that the requirements to report Beneficial Ownership are stayed. But stay tuned since that answer may change once again. Finally, they have included a few enforcement cases, one on the misappropriation of client funds and two on cherry-picking. Read more here.
Regulatory Roundup for September 2024
From our friends at SEC3:
August Regulatory Updates
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.