Tag Archives: Compliance


SEC Chair Endorses Uniform Fiduciary Standard

March 18, 2015 Dear Friends, SEC Chair Mary Jo White announced that she would like the SEC to develop a new rule, requiring brokers to have a fiduciary duty akin to investment advisers – to hold clients’ interests ahead of their own, rather than just making “suitable” recommendations. Additionally, Chair White endorsed the concept of third party providers supplementing the […]

SEC Exam Focus – Alternative Investment Companies

Dear Friends, As the SEC stated in its Examination Priorities for 2015, the OCIE will focus on alternative investment companies and never before examined investment companies, covering, but not limited to, the following areas: Leverage, Liquidity and Valuation Policies and Practices; Internal Controls: Compliance Personnel, Staffing, Funding, and Empowerment of Boards; and Marketing Funds to Investors. In response, we are […]

SEC’s Goals for 2015

November 21, 2014 Dear Friends, The SEC outlined its objectives for 2015 in its Financial Report for Fiscal Year 2014, including the following regulatory initiatives: Implementation of Comprehensive Regulatory Framework for OTC Derivatives; Acceleration of the Implementation of Executive Compensation Disclosure Requirements; Consider Uniform Fiduciary Standard of Conduct for Investment Advisers and Broker-Dealers; Review of the Accredited Investor Definition; Establishment […]

SEC Adopts Regulation SCI

November 20, 2014 Dear Friends, The SEC voted to adopt Regulation Systems Compliance and Integrity (SCI) requiring “comprehensive new controls for technological systems…to ensure any issues are promptly corrected and communicated to market participants and the Commission,” said SEC Chair Mary Jo White.   Certain self-regulatory organizations, alternative trading systems, plan processors, and exempt clearing agencies (“SCI Entities”) must adopt […]

SEC Announces Enforcement Action Against Compliance Officer

Dear Friends, Yesterday, the SEC announced an enforcement action against a compliance officer for allegedly altering a trading review document.   In 2010, the SEC charged an employee with insider trading. According to the SEC, after the employee was charged with insider trading, the compliance officer altered the document to make it appear that she performed a more thorough review […]

SEC Sanctions 19 Firms for Short Selling Violations

September 16, 2014 Dear Friends, The SEC charged 19 firms and one individual trader with short selling violations, resulting in a $9 million settlement. Rule 105 of Regulation M (Reg M) prohibits purchasing securities in follow-on and secondary offerings when the purchaser has effected short sales in the securities within a specified period, prior to the pricing of an offering […]

SEC Charges Hedge Fund With Whistleblower Retaliation

Dear Friends, For the first time the SEC filed a case under its new authority to bring anti-retaliation enforcement actions. The SEC charged a hedge fund with engaging in prohibited principal transactions and retaliating against the whistleblower. The firm agreed to pay $2.2 million and to hire an independent compliance consultant. The CIO conducted transactions between the hedge fund and […]

CFTC Guidance on CPO Delegation Process

Dear Friends, On May 12, 2014, the CFTC announced a streamlined approach for considering requests for no-action relief with respect to CPOs who delegate certain activities to a registered CPO (e.g. GPs of limited partnerships who delegate CPO authority to a registered investment manager). Each delegating CPO must submit a letter certifying it meets certain criteria outlined in the release. […]

SEC Provides Guidance on Testimonials and Social Media

Dear Friends, On March 31, 2014, the SEC issued Guidance regarding Rule 206(4)-1(a)(1) of the Investment Advisers Act (“the testimonial rule”) and social media. The SEC generally prohibits client testimonials. However in its guidance, the SEC said client testimonials on independent social media sites are permissible, in certain circumstances, with the following important considerations: An investment adviser (“IA”) or investment […]

SEC Charges Men with Insider Trading on Information From Wives

Dear Friends, On March 31, 2014, the SEC announced the following charges against two men that traded on confidential information from their wives: Tyrone Hawk overheard his wife’s work calls indicating that her company, Oracle Corp., was planning to acquire Acme Packet Inc.  Hawk violated a duty of trust when he purchased Acme Packet shares prior to the acquisition and […]