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””

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”

Non-Broker Protocol Transitions – How to Prepare for and Avoid Litigation

The Broker Protocol simplified employment transitions by financial professionals over the last decade and a half. (I use the term “employer” and “employment” loosely, and it is intended to capture independent contractor situations too.) The Broker Protocol made it relatively simple to transition from one broker-dealer or financial institution to another without fear of litigationContinue reading “Non-Broker Protocol Transitions – How to Prepare for and Avoid Litigation”

Proposed Changes to FINRA’s MFA Requirement on Behalf of Law Firms and Compliance Consultants

This is a gentle reminder that while FINRA only regulates its broker-dealer members, it hosts the Investment Adviser Registration Depository (“IARD”) and Central Registration Depository (“CRD”). The IARD and CRD are two systems used by investment advisers registered with states and the SEC and exempt-reporting advisers. FINRA has adopted a new multi-factor authentication system (“MFA”)Continue reading “Proposed Changes to FINRA’s MFA Requirement on Behalf of Law Firms and Compliance Consultants”