Paying for Playing: SEC Brings First Pay-to-Play Action against an Investment Adviser

The SEC has brought the first action under the “pay-to-play” rule adopted under the Investment Advisers Act. Andrew Ceresney, director of the SEC Enforcement Division, served notice that the SEC “will hold investment advisers strictly liable for pay-to-play violations” and that broker-dealers will be held to a similar standard.

The SEC also found that two affiliated exempt reporting advisers were operationally integrated for the purposes of determining exemption from registration requirements. Accordingly, the SEC charged the adviser, as an integrated entity, with failing to register as an investment adviser.

Please see full alert below for more information.

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Topics:  Affiliates, Broker-Dealer, Enforcement, Investment Adviser, Investment Advisers Act of 1940, Pay-To-Play, SEC

Published In: General Business Updates, Elections & Politics Updates, Finance & Banking Updates, Securities Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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