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Portfolio manager and advisory firm misrepresented risk in mutual fund.  [https://www.sec.gov/news/press-release/2020-21] Office of Compliance Inspections and Examinations published its observations on cybersecurity and resiliency practices. [Note: https://www.sec.gov/news/press-release/2020-20] Husband and wife billion-dollar Ponzi scheme. [https://www.sec.gov/news/press-release/2020-18] CEO of Exempt Reporting Adviser charged with wire fraud, illegal monetary transactions, and making false statements to the SEC. [Note: https://www.sec.gov/litigation/admin/2020/ia-5439.pdf and https://www.justice.gov/usao-ct/us-v-barton-stuck and https://portal.ct.gov/DOB/Enforcement/Securities-Orders-2/Signal-Lake-Management-et-al—Findings-and-Order] Registered investment … Read More

SEC proposed amendments to modernize the rules under the Investment Advisers Act addressing investment adviser advertisements and payments to solicitors. The proposed amendments are intended to update these rules to reflect changes in technology, the expectations of investors seeking advisory services, and the evolution of industry practices. The proposed amendments to the advertising rule would … Read More

Full and fair disclosures of conflicts of interest particularly financial interest.  [https://www.sec.gov/investment/faq-disclosure-conflicts-investment-adviser-compensation] SEC examining foreign investment advisers.  [https://www.sec.gov/news/press-release/2019-223] Formation of its Asset Management Advisory Committee.  [https://www.sec.gov/news/press-release/2019-208] Undisclosed compensation arrangements.  [https://www.sec.gov/litigation/litreleases/2019/lr24633.htm] Insider trading of IT employee.  [https://www.sec.gov/litigation/litreleases/2019/lr24638.htm] Preferential redemptions/other disbursements out of a hedge fund.  [https://www.sec.gov/litigation/litreleases/2019/lr24640.htm] Breached its fiduciary duty and defrauded retail advisory clients by, … Read More

https://www.sec.gov/litigation/admin/2019/ia-5371.pdf [On September 26, 2019, Cetera Investment Advisers LLC settled an enforcement action with the SEC.  Since at least January 2007, Cetera has paid cash fees to approximately 350 banks to, among other things, solicit investment advisory clients on behalf of Cetera. As part of this process, Cetera did not require the banks to give clients … Read More

On July 2, 2019, the SEC charged Parrish Group, an investment adviser, and Davis, Parrish Group’s founder, with material misrepresentations. Specifically, Parrish Group and Davis repeatedly misled prospective clients about, among other things, Parrish Group’s assets under management, its clients, the number and identity of its employees, and its registration status with the SEC. Parrish … Read More

On July 1, 2019, the SEC charged Fieldstone Financial Management Group LLC and its principal Kristofor Behn with defrauding retail investment advisory clients by failing to disclose conflicts of interest related to their recommendations to invest in securities issued by affiliates of Oregon-based Aequitas Management LLC.  Behn also fraudulently misused approximately $500,000 of one investor’s … Read More

On June 27, 2019, the SEC charged State Street Bank and Trust Company with overcharging mutual funds and other registered investment company clients for expenses related to the firm’s custody of client assets. The overcharges included a secret markup that State Street tacked on to the cost of sending secured financial messages through the Society of … Read More

On June 10, 2019, David Goulding was the Chief Compliance Officer (“CCO”) for The Nutmeg Group LLC (“Nutmeg”), an SEC registered investment adviser and general partner to 15 unregistered investment partnerships (“the Funds”). His responsibilities included valuing the Funds’ investments, preparing quarterly account statements for the Funds, and tracking the assets of the Funds.  David … Read More

On June 5, 2019, the SEC issued new rule adopting amendments to SEC Form CRS and issued an interpretative guidance.  The Form CRS Relationship Summary will require registered investment advisers and broker-dealers to provide retail investors with simple, easy-to-understand information about the nature of their relationship with their financial professional.  While facilitating layered disclosure, the … Read More

On June 4, 2019, the SEC charged a private fund manager in the mortgage-backed securities space has agreed to pay a $5 million penalty to settle charges stemming from compliance deficiencies that contributed to the firm’s failure to ensure that certain securities in its flagship fund were valued properly.  The fund manager’s chief investment officer … Read More