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
On September 27, 2023, the Securities and Exchange Commission (SEC) issued a press release announcing charges against officers, directors and large investors in public companies for failure to timely make Section 16, Schedule...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
Key Points -
On August 24, 2023, a three-judge panel of the 2nd Circuit unanimously held that the syndicated term loans at issue were not “securities” under the test articulated by the Supreme Court in Reves v. Ernst &...more
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
Key Points -
A judge in the Southern District of New York recently held that (i) the crypto asset XRP is not, on its own, a security and, (ii) as a result, the determination of whether an offer or sale of XRP required SEC...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
In 2018, an investment professional sued the firm he co-founded for wrongful termination and federal privacy law violations associated with the former employer’s remote accessing into a desktop computer it had purchased for...more
On March 29, 2023, the National Futures Association (NFA) announced that NFA Compliance Rule 2‑51: Requirements for Members and Associates Engaged in Activities Involving Digital Asset Commodities will become effective on May...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
The Securities and Exchange Commission adopted rules on December 14, 2022 that will require...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 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
Key Points -
Until August 12, 2025, CPOs and CTAs may continue to file position limit disaggregation notices upon request, rather than prospectively, and exempt CTAs may continue to rely upon the “independent account...more
Key Points -
The SEC and the FCA each publish annual reports, which can offer a useful insight into their enforcement actions.
The data in the reports only represents a snapshot of the regulators’ activities, but is...more
Key Points -
The 2nd Circuit is considering whether syndicated term loans—i.e., loans to corporate entities provided by a group of lenders, rather than a single lender—are “securities” under a U.S. Supreme Court decision...more
Key Points -
The SEC’s Division of Examinations published a risk alert that, in the context of a focus on MNPI, highlighted observed deficiencies related to the use of alternative data by private fund managers and other...more
On February 9, 2022, the U.S. Securities and Exchange Commission (SEC) issued proposed rules (the “Proposed Rules”) for private fund advisers that, if adopted in their current form, could impose significant additional costs...more
Key Points -
The DOJ and CFTC have filed insider trading charges against a Houston-based energy trader for allegedly disclosing confidential information to a third party who then used the information to trade profitably....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