In Robare, the D.C. Circuit clarifies the negligence and willfulness standards under Sections 206 and 207 of the Act.

On April 30, 2019, the United States Court of Appeals for the District of Columbia Circuit issued its decision in The Robare Group, Ltd., et al. v. Securities and Exchange Commission. The court’s ruling upheld the Securities and Exchange Commission’s (the Commission’s or the SEC’s) holding that the defendants violated Section 206(2) of the Investment Advisers Act (the Act) by negligently failing to disclose their conflict of interest arising from an incentive arrangement in place with Fidelity Investments Inc. (Fidelity) and reversed the Commission’s holding that the defendants violated Section 207 of the Act by willfully filing Form ADV, which did not mention the conflict of interest.