Investment Adviser Regulation

Recently, the Office of Compliance Inspections and Examinations (“OCIE”) released an alert to broker-dealers and registered investment advisers regarding the risks associated with credential stuffing.  See https://www.sec.gov/files/Risk%20Alert%20-%20Credential%20Compromise.pdf.

Credential stuffing is an automated attack on web-based user accounts and direct network login account credentials. Cyber attackers obtain lists of usernames, email addresses, and corresponding passwords from

The SEC’s Office of Compliance Inspections and Examinations (“OCIE”) conducted a series of examinations into private fund advisers. See the SEC risk alert here. To say the least, OCIE was not pleased with the results, indicating a significant percentage of these advisers had compliance issues.  In particular, OCIE found problems with: (1) conflicts of

The SEC’s Office of Compliance and Inspections (“OCIE”), recently, issued an alert—more like a shot across the bow—to BDs and RIAs regarding its concerns over activities in the industry concerning the challenges encountered by COVID-19.  See https://www.sec.gov/files/Risk%20Alert%20-%20COVID-19%20Compliance.pdf.  As part of its efforts, OCIE made certain recommendations concerning: (1) investor asset protection; (2) personnel supervision; (3)

The United States Department of Labor (“DOL”) has had a very active summer regulating the securities industry. Yes, you heard it right, the DOL has made certain pronouncements that have considerable effect on the securities industry.

Initially, the DOL allowed 401(k) plans to invest in private equity funds so long as they are managed by

Sadly, the hackers of the world have not let the pandemic get in the way of their nefarious activities.  In particular, BDs and RIAs have been primary targets.   In our prior blog postings, we discussed business continuity plans and the requirement these plans include cybersecurity provisions.   We believe that the SEC, FINRA, and the various

Over the last several months, there has been an increase in questions from registered investment advisers relating to using hypothetical performance information.  Generally, the use of such information is fraught with danger as well as SEC scrutiny.  Not so long ago, the SEC went after a number of investment advisers and forced them to pay

A chief compliance officer (“CCO”) for a registered investment adviser (“RIA”) found himself barred from any compliance or supervisory role in the future because he willfully refused to fix a number of compliance issues.  See https://www.sec.gov/litigation/admin/2017/34-82397.pdf. 

The RIA had conducted a review that uncovered numerous compliance problems.  Despite having notice of the results of this

In rapid succession, the SEC has issued warnings and announced sanctions against registered investment advisers for fee and expense practices, false statements regarding assets under management, and misleading performance data.  No one should be surprised that the SEC is actively seeking to uncover transgressions in the RIA field.

Initially, the SEC’s Office of Compliance Inspections

The SEC recently announced an enforcement initiative that will target retail investor harm. The agency’s task force will use data analytics to find widespread problems regarding fee disclosures and unsuitable investment recommendations. In addition to data analytics, the SEC will rely upon tips, complaints and referrals that come into the SEC.

This heightened analysis of