The principle of attorney-client confidentiality is sacrosanct. In California, for example, an attorney may only reveal a client’s confidential information to the extent the attorney “reasonably believes the disclosure is necessary to prevent a criminal act that the [attorney] reasonably believes is likely to result in death or substantial bodily […]
On the heels of the Financial Industry Regulatory Authority issuing a Report on Digital Investment Advice last month, on April 7 the Securities and Exchange Commission approved a FINRA rule amendment that requires registration of persons that are “primarily responsible for the design, development or significant modification of algorithmic trading […]
I can’t guarantee much from my personal crystal ball, but looking across the regulatory horizon into 2016 there is one undeniable certainty: Securities attorneys will be just fine. The sheer volume of complicated rulemaking that is pouring out of Washington bodes well for billable hours but not for bottom lines. […]
October 26th marked the final day of briefing before the SEC in what could be a very precedential case for investments advisors, compliance officers and the independent compliance consulting community. In the Matter of The Robare Group, Ltd. began its life in September 2014 as an order instituting administrative and cease-and-desist […]
This past week the SEC announced a $40 million enforcement action against investment advisor First Eagle Investment Management and its affiliated broker-dealer FEF Distributers for what it touted as the first to arise from its “distribution-in-guise” initiative. Advisors to funds have been anxiously awaiting some sort of guidance since the […]
After Henry Hill took his first pinch in Goodfellas, Jimmy Conway praised young Henry in the courtroom for learning and personifying the Mafia code: “Never rat on your friends and always keep your mouth shut.” While certainly one of the great bro-quotes in movie history, I don’t think I’m venturing […]
A recent string of SEC enforcement actions should prompt advisors to carefully review their Form ADV for one potentially dangerous word: “may.” It likely appears many times throughout various sections, and in most instances is likely perfectly appropriate. Where it isn’t appropriate, the SEC has made clear, is when it […]
The SEC has had a healthy obsession with conflicts of interest as of late, and this week’s Guidance Update from the Division of Investment Management is no exception. The update, entitled “Acceptance of Gifts or Entertainment by Fund Advisory Personnel – Section 17(e)(1) of the Investment Company Act,” may at […]
Let me get one thing straight right out of the gate: technology is not a compliance panacea. It may afford incredible efficiencies and in certain applications be substantially more accurate and reliable than us mortal humans, but it is not a set-it-and-forget-it prophylactic to all nefarious intentions. After all, technology […]
Due diligence in the advisory world is like an onion: the more layers you peel back, the more it’s likely to stink. The goal, however, is to expose the stink and cook through it to satisfy both regulatory expectations and fiduciary obligations. But enough with bizarre food analogies… Much like […]
This is the time of year when I tend to throw things at my television, yell at my car radio and redirect most of the mail I receive directly to the trash (sorry – the recycling bin for you greenies). The reason is simple: it’s election season, and the amount […]
It’s important to get one thing out of the way right off the bat: technically there is no requirement imposed upon investment advisors to maintain an anti-money laundering program pursuant to the Bank Secrecy Act of 1970, the Money Laundering Control Act of 1986 or the USA PATRIOT Act, as […]
Congratulations! You’ve contracted with a vendor to capture and archive all emails sent to and from employees within your advisory firm. Emails are set to be stored for not less than five years pursuant to the SEC’s recordkeeping requirements and are ready to be turned over when requested during an […]
By this point, all advisors with a Dec. 31 fiscal year-end should have filed their annual updating amendment to Forms ADV Part 1 and 2 with the Securities and Exchange Commission through the Investment Adviser Registration Depository. If any material changes occurred since the last annual updating amendment, advisors should […]
The notion of “regulatory hot topics” has become somewhat of a misnomer given the “broken-windows” approach of today’s SEC [see footnote below]. To say that some regulatory topics are “hot” naturally implies that some regulatory topics are…not hot. I don’t think I’m too far afield to suggest that SEC Chair […]
Client referrals are arguably the lifeblood of the financial services industry, and understandably so. They are perhaps the greatest compliment a financial professional can receive, and it sure beats a random LinkedIn endorsement from that guy you had a fleeting interaction with at a conference five years ago. Some financial […]
The last time I used a microfilm reader was in the dusty depths of my college library, reviewing newspaper clippings from the 1960s for some God-forsaken reason. The windowless bunker looked and smelled as if it had been vacuum-sealed since the very period in history I was researching. Fast forward […]
Although the SEC may have hemorrhaged senior staff this year, its rules and regulations remain in full force and effect. For RIAs, this means that the end of the year should be a time to prepare for and tackle the annual regulatory requirements imposed upon them. In the first part of our […]
Malls are starting to be overrun with holiday shoppers, temperatures are dropping and congressional members will soon take a recess from fulfilling their civic duty of wearing power suits and hemorrhaging taxpayer dollars. Ah yes, all the signs of a coming winter are upon us. Although the SEC may have […]
One of the tenets of Modern Portfolio Theory is that risk and return are related; that is, a higher degree of risk in a client’s investment portfolio is expected to generate a higher return. Conversely, less risk is expected to generate a lower return. More risk in a compliance program, […]
Not all registered investment advisers are afforded a Manhattan zip code, enough vice presidents to annex France, or a travel budget the size of our national debt. Quite to the contrary, it’s more the norm for the smaller RIA to have a Des Moines area code, a combined CEO/CFO/CCO/Office Manager […]
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