On July 20, 2020, the SEC announced that UBS Financial Services has agreed to pay more than $10 million to resolve charges that it circumvented the priority given to retail investors in certain municipal bond offerings.  According to the SEC’s order, over a four-year period, UBS improperly allocated bonds intended for retail customers to parties known in the … Read More

In July 2020, the Office of Compliance Inspections will begin examinations to assess compliance with Form CRS. On July 27 2020, the SEC Staff Standards of Conduct Implementation Committee began reviewing relationship summaries from a cross-section of firms to assess compliance with the content and format requirements of Form CRS.  However, the Committee’s initial reviews have … Read More

On July 17, 2020,  the SEC charged David Hu, the co-founder and chief investment officer of International Investment Group LLC (IIG), a former registered investment adviser, with fraud for his role in a $60 million Ponzi-like scheme. The SEC’s complaint alleges that Hu orchestrated multiple frauds on IIG’s investment advisory clients. According to the complaint, Hu grossly overvalued … Read More

On July 16, 2020, First Western Capital Management Company (“FWCM”) settled an administrative proceeding where it agreed it purchased for advisory clients securities that were sold in reliance on Rule 144A under the Securities Act of 1933 (“Securities Act”) without having adequate compliance policies and procedures and without providing investment adviser representatives (“IARs”) training and supervision of … Read More

On July 10, 2020, the SEC announced that it has proposed to amend Form 13F to update the reporting threshold for institutional investment managers and make other targeted changes. The threshold has not been adjusted since the Commission adopted Form 13F over 40 years ago.  The proposal would raise the reporting threshold to $3.5 billion from $100M. … Read More

On July 9, 2020, BNB Wealth Management, LLC settled a SEC administrative proceeding in connection with its mutual fund share class selection practices. BNB purchased, recommended, or held for certain advisory clients mutual fund share classes that charged fees pursuant to Rule 12b-1 instead of lower-cost share classes of the same funds that were available to the … Read More

On July 2, 2020, the SEC announced settled charges against Franklin Advisers, Inc. for breaching its fiduciary duty to its client funds and failing to follow its own policies and procedures, and settled charges against Franklin Advisers and Franklin Templeton Investments Corp. for causing client funds to violate investment limitations.  According to the SEC’s order, both Franklin … Read More

On June 25, 2020, five federal regulatory agencies finalized a rule modifying the Volcker rule’s prohibition on banking entities investing in or sponsoring hedge funds or private equity funds. The Volcker rule generally prohibits banking entities from engaging in proprietary trading and from acquiring or retaining ownership interests in, sponsoring, or having certain relationships with a hedge … Read More

On May 29, 2020, the SEC settled charges against an investment adviser for inadequate disclosure of its mutual fund share class selection practices. At times the adviser held for advisory clients mutual fund share classes that charged fees pursuant to Rule 12b-1 instead of lower-cost share classes of the same funds that were available to the … Read More

On April 7, 2020, the Office of Compliance Inspections and Examinations (OCIE)  issued two risk alerts: Examinations will focus on compliance with regulation Best Interest and examinations that focus on compliance with Form CRS.  https://www.sec.gov/news/press-release/2020-82 On April 17, 2020, an investment adviser settled charges that it advised its clients to purchase or hold mutual fund share classes that charged … Read More