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””
Author Archives: AdviserCounsel
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”
SEC Investigating Investment Advisers Whose Supervised Persons Received 12b-1 Fees on Advisory Accounts
If your investment adviser permitted its supervised persons to receive rule 12b-1 fees through an unaffiliated broker-dealer at any point in the last five years, you should start preparing for an examination by the SEC’s Office of Compliance Inspections and Examinations or an inquiry from its Division of Enforcement. (I recently covered the one ofContinue reading “SEC Investigating Investment Advisers Whose Supervised Persons Received 12b-1 Fees on Advisory Accounts”
SEC Settles With Investment Adviser Whose Associated Persons Received 12b-1 Fees from Unaffiliated Broker-Dealer
The Securities and Exchange Commission accepted an offer of settlement from Graham, Bordelon, Golson & Gilbert, Inc. (“Graham Bordelon”), an investment adviser with its headquarters is Monroe, Louisiana. This settled action is markedly different from the roughly hundred other actions involving share class selection practices to date. In this action, the SEC alleged that GrahamContinue reading “SEC Settles With Investment Adviser Whose Associated Persons Received 12b-1 Fees from Unaffiliated Broker-Dealer”
A Legal Analysis on Whether Form U4 is Subject to Ongoing Amendments for SEC Registered Investment Advisers
Recently, I was posed with the question of whether an investment adviser registered with the U.S. Securities and Exchange Commission has an ongoing obligation to update its supervised persons’ Form U4s. I always assumed the answer was yes, but I recently dug into this assumption from a legal perspective. After conducting a bit more legalContinue reading “A Legal Analysis on Whether Form U4 is Subject to Ongoing Amendments for SEC Registered Investment Advisers”
Strategies for Breaking Away While Subject to a Non-Solicitation Agreement
Financial professionals that have entered into an employment agreement or some other form of contract with their employer that contains an agreement not to solicit clients upon their departure are in an extremely difficult place. How do you get out of an employment situation that you no longer want to be in without taking unnecessaryContinue reading “Strategies for Breaking Away While Subject to a Non-Solicitation Agreement”