Risk Alert Following OCIE Examinations on Branch Offices

Today, OCIE released a Risk Alert focused on their recent observations from focused examinations of investment advisers that operate out of multiple locations or branch offices. These examinations focused on whether the examined investment advisers had adopted and implemented reasonably designed written policies and procedures and implemented investment advice in an appropriate manner. As aContinue reading “Risk Alert Following OCIE Examinations on Branch Offices”

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””

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”