Tag Archives: Compliance


Wall Street’s Most Thankless Job – Compliance Officer

February 3, 2016 Dear Friends, This morning the Wall Street Journal published an article on ” The Most Thankless Job on Wall Street” – compliance officer. According to the article, recent enforcement actions that have found compliance officers personally liable are driving experienced people to be more cautious about the profession – compliance officers say they feel unfairly singled out. […]

FINRA Suspends Rep for Failure to Disclose OBAs

Dear Friends, FINRA suspended a registered representative for failure to disclose outside business activities, resulting in a $15,000 fine and a six month suspension from association with any FINRA member. The representative failed to disclose that he was a director and officer of a publicly traded company and the existence of an outside securities account in his name. Additionally, the […]

Supreme Court to Hear Insider Trading Case

January 20, 2016 Dear Friends, The U.S. Supreme Court agreed to review a ruling of the U.S. Court of Appeals for the Ninth Circuit, which could clarify a key element of insider trading – what constitutes a personal benefit –  resolving a dispute between divided federal courts of appeals. Second Circuit Decision: In December 2014, the U.S. Court of Appeals […]

SEC 2016 Exam Priorities

January 11, 2016 Dear Friends, The SEC announced its examination priorities for 2016, as outlined below. Private Fund Advisers: The SEC’s examination of private fund advisers will focus on fees and expenses evaluating, among other things, the controls and disclosures associated with side-by-side management of performance-based and purely asset-based fee accounts. Never-Before-Examined Investment Advisers and Investment Companies: The SEC will […]

SEC Sanctions Investment Adviser for Improper Allocation of Expenses

November 23, 2015 Dear Friends, Today, the SEC issued an order against an investment adviser for improper allocation of expenses to its fund client (the “Fund”) and failure to adopt compliance policies and procedures, specific to Fund expense allocation, resulting in a $250,000 settlement. The SEC found that the firm negligently charged compliance, legal and operating expenses to the Fund. […]

Firm Agrees to Pay $1 Million Settlement for Custody Rule Violations

November 19, 2015 Dear Friends, Today the SEC announced that an investment adviser and its former CCO have agreed to settle charges that it repeatedly violated the custody rule. The Firm agreed to pay a $1 million penalty, to be suspended for one year from raising any capital, and to have a compliance monitor for three years. The former CCO […]

SEC Proposes Rules to Enhance Oversight of Dark Pools

November 19, 2015 Dear Friends, The SEC has voted to propose new rules to enhance transparency and regulatory oversight of dark pools. Pursuant to the new rules, alternative trading systems (ATS) that trade stocks listed on a national securities exchange (NMS stocks), including dark pools, would be required to publicly disclose detailed information via the new form ATS-N, including: Information […]

SEC Issues Risk Alert on Outsourced CCOs

November 10, 2015 Dear Friends, Yesterday, the SEC issued a Risk Alert outlining observations regarding examinations of SEC registered investment advisers and investment companies that outsource their Chief Compliance Officer (“CCO”) role to unaffiliated third parties. Specifically the SEC found: Communication: Frequent and in-person communication with employees (as opposed to impersonal emails only and/or pre-defined checklists) resulted in fewer inconsistencies between […]

SEC Enforcement Results for FY 2015

October 22, 2015 Dear Friends, Today the SEC released a summary of its enforcement actions for fiscal year 2015, touting the increase in total actions, from 676 in 2013, to 807 actions in 2015 and over $700 million more in disgorgement and penalties, over that same time period. “Vigorous and comprehensive enforcement protects investors and reassures them that our financial […]

SEC Chief of Staff on CCO Liability

October 16, 2015 Dear Friends, SEC Chief of Staff Andrew J. Donohue in a recent speech, stated that the SEC is not targeting compliance personnel. Mr. Donohue outlined three instances in which the staff will typically recommend the SEC bring an enforcement action – when Chief Compliance Officers (CCOs) have: (1) affirmatively participated in the misconduct; (2) helped mislead regulators; […]