Determining Whether a Client Can Invest in a Private Investment

I often receive questions from investment advisers on whether their clients can invest in a hedge fund, private equity fund, private company or some other type of private investment. For purposes of this article, I refer to them all as “private investments”. For example, clients will ask “can John Doe’s Trust invest in 123 Capital,Continue reading “Determining Whether a Client Can Invest in a Private Investment”

SEC Should Provide Clear Guidance Following Two Ocean Crypto Banking Relief

On October 26, 2020, the Wyoming Division of Banking issued “no-action” relief to Two Ocean Trust stating that i) Two Ocean is permitted to provide custodial services for both digital and traditional assets under Wyoming law, and (ii) that Two Oceancan refer to itself as a “qualified custodian” as that term is defined under the InvestmentContinue reading “SEC Should Provide Clear Guidance Following Two Ocean Crypto Banking Relief”

A Growing Trend for RIAs – Become a One-Stop Shop

As of October 1, 2020, out of 13,810 investment advisers registered with the U.S. Securities and Exchange Commission (SEC), more than 200 reported being actively engaged in the business of being an accountant or accounting firm. Almost a 1,000 reported an affiliation with an accountant or accounting firm. Another 28 reported being actively engaged inContinue reading “A Growing Trend for RIAs – Become a One-Stop Shop”

Recent “Guidance” on Form CRS Disciplinary History Is Bad “Law”

Recently, I wrote a post that investment advisers and broker-dealers should review their Form CRS in light of new guidance on the disciplinary history section (Review your Form CRS Disciplinary History Disclosure in Light of New Guidance). As that post addressed, earlier in the month, Commissioner Clayton and Directors Blass and Redfearn put forth a Joint StatementContinue reading “Recent “Guidance” on Form CRS Disciplinary History Is Bad “Law””

Review your Form CRS Disciplinary History Disclosure in Light of New Guidance

On October 8, 2020, Securities and Exchange Commission’s Chairman Clayton along with Dalia Blass, Director, Division of Investment Management and Brett Redfearn, Director of Division of Trading and Markets released a Joint Statement Regarding New FAQs for Form CRS. The Joint Statement focused on the disciplinary history section of Form CRS, which became effective earlierContinue reading “Review your Form CRS Disciplinary History Disclosure in Light of New Guidance”

SEC Proposes Exemptive Relief for “Finders” – A Win-Win Scenario?

I was recently quoted by WealthManagement.com on the recent “finders” exemption proposal by the U.S. Securities and Exchange Commission. That proposal would provide clarity to “finders” on how they can avoid allegations that they are acting as broker-dealers in need of registration under Section 15 of the Securities Exchange Act of 1934. The proposal is available here.Continue reading “SEC Proposes Exemptive Relief for “Finders” – A Win-Win Scenario?”

The Rise of Fee-Based Annuities and Potential Licensing Issues for Independent Investment Advisers

In recent years, as they have seen the exponential growth of independent investment advisers, insurance issuers have sought creative ways to place their products in the space. Hence the creation of the fee-based variable annuity–a product that was at one time only an arrow in the quiver of the commission brokerage industry. Now that theseContinue reading “The Rise of Fee-Based Annuities and Potential Licensing Issues for Independent Investment Advisers”

Morningstar Presentations Present Issues for Investment Advisers

As an attorney in the investment management space, I have seen the use of Morningstar presentations create issues for investment advisers at an increasing rate during examinations conducted by the Securities and Exchange Commissions (“SEC”) Office of Compliance Inspections and Examinations (“OCIE”). The issues that I have seen typically revolve around the use of hypotheticalContinue reading “Morningstar Presentations Present Issues for Investment Advisers”

Expungement of Criminal Disclosure on Forms U4, Form U5, and IAPD/Brokercheck

Form U4 requests information about various criminal, regulatory, financial, and litigation matters. While many of these disclosures are relevant and important to clients and prospective clients, others are less important. For example, I have seen countless college incidents. Some involve taxi rides, fake IDs, alcohol, or marijuana. This article is intended to help those whoContinue reading “Expungement of Criminal Disclosure on Forms U4, Form U5, and IAPD/Brokercheck”