During March 2020, one of the most streamed shows was Tiger King, a documentary about “Joe Exotic” a/k/a Joseph Allen Schreibvogel a/k/a Joseph Allen Maldonado-Passage, a “zoo owner [who] spirals out of control amid a cast of eccentric characters in this true murder-for-hire story from the underworld of big cat breeding:’1 Thus, Tiger King has much in common with the securities enforcement matters from March: fraud, broken rules, sanctions, and (arguably) eccentric characters. One big difference, of course, is that last month’s enforcement matters did not involve cat breeding, big or small. (We can’t make any promises about April’s enforcement actions.) Thus, the March enforcement matters present important lessons for broker-dealers and investment advisers (as well as important lessons for zoo owners, assuming that the zoo is an outside business activity).
Back to Office Guidance
From our friends at Hardin Compliance Consulting LLC, helpful guidance for broker dealers and RIAs, as they plan their return:
- Question & Answer Employer Guide: Return to the Work in the time of COVID-19 by Faegre Drinker.
- Making your Office Safe to Return after COVID-19 by Riia O’Donnell of Workest.
- Preparing for Reentry in the US by Goodwin Procter LLP.
- Reopening Your Doors – BakerHostetler’s Return to Work Toolkit
NJ Joins Other States to Protect Seniors, NASAA Warns Smaller Advisers about Cybersecurity Risks, SEC Settles Valuation, and Fund Expense & Wrap Fee Actions
June Regulatory Updates from Cari Hopsfenperger at Hardin Compliance Consulting LLC.
Topics include:
- New Jersey Adopts Its Own Senior Safe Legislation
- NASAA 2020 Investment Adviser Section Annual Report
- Notice to Members I-20-20: Coronavirus Update – Relief from Fingerprinting Requirements
- Notice to Members I-20-18: Amendments to NFA Compliance Rule 2-29 and Related Interpretive Notice Now Effective
- Broker-Dealer Recruiting Tactics Lead to Reg S-P Violations
- “May” I? No, You “May” Not! SEC Settles with Private Equity Adviser with Conflicted Expense Reimbursements
- Whoops! I Did It Again! Adviser Fails to Learn from Mistakes, Blows up Fund
- Five Million Reasons Why Wrap Fee Transparency is Important
- Mutual Fund Manager Misprices Odd Lot Bonds, Overstates NAV and Related Performance
SEC extends flexibility due to COVID-19
On March 25, 2020 the SEC issued several exemptive orders to extend temporary COVID-19 relief.
· The relief further extends the filing periods covered by its previously enacted conditional reporting relief for certain public company filing obligations.
· The relief further extends regulatory relief previously provided to funds and investment advisers whose operations may be affected by COVID-19.
· The SEC and its staff also provided public company disclosure guidance.
SEC Staff Proposes Rules on Streamlining Private Exemptions
On March 4, 2020, the Securities and Exchange Commission (the SEC) issued a proposed rule on ways to simplify, harmonize and improve certain aspects of the exempt offering framework to promote capital formation while preserving important investor protections.
- The Proposed Rule is substantially informed by public input that was provided in response to the SEC’s June 2019 concept release on the harmonization of securities offering exemptions.
- The goal of the Proposed Rule is to reduce the unnecessary complexity within the offering framework and to allow market participants to navigate through the exempt offering framework more easily.
- The changes outlined in the Proposed Rule could bring a wider variety of investors and distribution channels back into the market for issuers, including for BDCs, and such expansion would increase the availability of capital and allow more flexibility for BDC fundraising activities.