Last week, the Securities and Exchange Commission imposed expanded privacy and cybersecurity obligations on fund managers and sponsors registered with the SEC as investment advisers. While many registered investment advisers...more
5/21/2024
/ Breach Notification Rule ,
Customer Information ,
Cybersecurity ,
Fund Managers ,
Incident Response Plans ,
Investment Adviser ,
Notice Requirements ,
Policies and Procedures ,
Privacy Laws ,
Private Funds ,
Recordkeeping Requirements ,
Regulation S-P ,
Securities and Exchange Commission (SEC) ,
Sponsors
On April 12, 2024, the U.S. Securities and Exchange Commission imposed fines and other sanctions on five registered investment advisers (RIAs) for violations of the Investment Adviser Marketing Rule (Rule 206(4)-1), which has...more
On April 3, 2024, the U.S. Securities and Exchange Commission (SEC) announced its first enforcement action against a registered investment adviser (RIA) with no ties to a broker-dealer regarding so-called “off-channel”...more
4/10/2024
/ Broker-Dealer ,
Electronic Communications ,
Enforcement Actions ,
Fund Managers ,
Investigations ,
Investment Adviser ,
Investment Management ,
Recordkeeping Requirements ,
Registered Investment Advisors ,
Securities and Exchange Commission (SEC) ,
Securities Regulation ,
Securities Violations
Key Points - On February 13, 2024, FinCEN issued an NPRM that seeks to include certain investment advisers in the definition of “financial institution” under the BSA. As described in the NPRM as well as in FinCEN’s fact...more
2/16/2024
/ AML/CFT ,
Anti-Money Laundering ,
Bank Secrecy Act ,
Chief Compliance Officers ,
Due Diligence ,
Exempt Reporting Advisers (ERAs) ,
Financial Institutions ,
FinCEN ,
Investment Adviser ,
Investors ,
Notice of Proposed Rulemaking (NOPR) ,
Policies and Procedures ,
Proposed Rules ,
Recordkeeping Requirements ,
Risk Assessment ,
Suspicious Activity Reports (SARs)
Key Points - Last week, the SEC announced settlements with 16 broker-dealers, dually registered broker-dealers and investment advisers, and affiliated investment advisers in connection with their failures to maintain and...more
Earlier today, the Securities and Exchange Commission in a 3‑2 vote adopted new Rules 3a5‑4 and 3a44‑2 (together, the Dealer Rules) under the Securities Exchange Act of 1934, as amended (the Exchange Act), that will define...more
In the weeks since publishing our original alert, FinCEN released several frequently asked questions (FAQs) on the application of the Corporate Transparency Act (CTA). Private fund managers are likely to find two of these...more
2/1/2024
/ Beneficial Owner ,
Commodity Pool ,
Corporate Transparency Act ,
Exemptions ,
FinCEN ,
Foreign Corporations ,
Fund Managers ,
Investment Adviser ,
Investment Advisers Act of 1940 ,
Limited Liability Company (LLC) ,
New York ,
Popular ,
Private Funds ,
Reporting Requirements ,
Subsidiaries ,
Transparency
On October 24, 2023, the Director of the Securities and Exchange Commission’s Enforcement Division, Gurbir S. Grewal, gave a keynote address to the New York City Bar Association’s 2023 Compliance Institute.
This address,...more
Key Points -
Last week, the SEC announced settlements with 10 broker-dealers and affiliated investment advisers in connection with their failures to maintain and preserve electronic “off-channel” communications....more
Investment Advisers: Assessing Risks, Scoping Examinations, and Requesting Documents*
I. Introduction -
The SEC-registered investment adviser (“adviser”) population is large and diverse, ranging from global asset managers...more
9/12/2023
/ Audits ,
Brokerage Accounts ,
Business Operations ,
Compliance ,
Cybersecurity ,
Disclosure Requirements ,
Ethics ,
Financial Records ,
Insider Trading ,
Internal Controls ,
Investment Adviser ,
Marketing ,
Policies and Procedures ,
Risk Alert ,
Risk Management ,
Securities ,
Securities and Exchange Commission (SEC) ,
Trading Platforms ,
Valuation
A recent enforcement action against two affiliated wealth management businesses raises concerns over whether and how other registered investment advisers will be subject to sanctions for issues that arise in the ordinary...more
8/31/2023
/ Acquisitions ,
Anti-Fraud Provisions ,
Censures ,
Corrective Actions ,
Enforcement Actions ,
Fund Managers ,
Investment Adviser ,
Investment Advisers Act of 1940 ,
Policies and Procedures ,
Private Funds ,
Sanctions ,
Securities and Exchange Commission (SEC) ,
Settlement ,
Wealth Management ,
Wells Fargo
With the announcement of the new Private Funds Rule by the U.S. Securities and Exchange Commission (SEC), a full text of the amendments is linked below. The amendments are highlighted to show the changes from the initial...more
On June 8, 2023, the SEC Division of Examinations staff (EXAMS) published a risk alert focused on the new Marketing Rule (Rule 206(4)-1 under the Investment Advisers Act of 1940). While this new risk alert largely mirrors...more
INTRODUCTION -
Registered investment advisers to private funds clients are required to make filings with the Securities and Exchange Commission (SEC) each year and deliver certain information to their clients. In...more
On Tuesday, February 7, the Division of Examinations of the U.S. Securities and Exchange Commission released its 2023 Examination Priorities. Private fund sponsors and managers should pay attention to the Priorities for two...more
As a general principle, the Marketing Rule requires registered investment advisers to include net performance alongside any presentation of gross performance. Market practice on whether or how this principle applies to case...more
In December 2020, the Securities and Exchange Commission (“SEC”) adopted changes to Rule 206(4)-1 under the Investment Advisers Act to modernize the regulatory framework for investment advisers’ advertising and marketing...more
Late last year, Securities and Exchange Commission (SEC) Chair Gary Gensler warned private fund managers that they should be prepared for increased regulatory scrutiny. Shortly thereafter, in February 2022, the SEC announced...more
The substantive provisions of the new Marketing Rule come into effect for all private fund managers, fund sponsors and other investment advisers registered with the U.S. Securities and Exchange Commission in one month (i.e.,...more
The latest round of penalties assessed for violations of the U.S. Securities and Exchange Commission (SEC) pay-to-play rule highlight the strict liability nature of Rule 206(4)-5. This month, the SEC announced five-figure...more
Compliance Reminders for 2022 -
Registered investment advisers to private funds clients are required to make filings with the Securities and Exchange Commission (SEC) each year and deliver certain information to their...more
Private funds should be prepared for increased oversight from the Securities and Exchange Commission (SEC), following a landmark year of enforcement cases. In 2021, the Commission brought 159 enforcement actions against...more
2/3/2022
/ Enforcement Actions ,
Fiduciary Duty ,
Form PF ,
Fund Managers ,
Investment Adviser ,
Investment Advisers Act of 1940 ,
Policies and Procedures ,
Private Equity ,
Private Funds ,
Securities and Exchange Commission (SEC) ,
Securities Violations
Any doubts over whether the U.S. Securities and Exchange Commission considers advisory fees to be a focus area for 2022 were dispelled over the past several weeks. In four separate public statements, the SEC and the Staff of...more
On July 26, 2021, 21 investment advisers entered into settlements with the Securities and Exchange Commission to resolve charges that they failed to timely file and deliver their relationship summaries on Form CRS. Penalties...more
On July 21, 2021, the Securities and Exchange Commission’s Division of Examinations issued a Risk Alert on cross trades and principal transactions.1 The Risk Alert’s guidance and warnings were based on over 20 examinations of...more