Tag Archives: SEC


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 Charges Investment Adviser with Custody Rule Violations

October 29, 2014 Dear Friends, Today, the SEC announced charges against an investment adviser for violating the Custody Rule, for consistently delivering audited financials late. Pursuant to the Custody Rule, investment advisers with custody of private fund assets, must distribute audited financials to investors within 120 days of fiscal year end.  In this case, the firm delivered the audited financials […]

SEC’s First High Frequency Trading Manipulation Case

October 16, 2014 Dear Friends, Today, the SEC sanctioned a high frequency trading firm with fraudulent trading to manipulate closing prices, resulting in a $1 million penalty and marking the SEC’s first high frequency trading manipulation case. According to the SEC, the firm placed a large number of aggressive trades in the final two seconds of the trading day to […]

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 Charges PE Firm with Misallocation of Expenses

Dear Friends, The SEC charged a private equity firm with breaching its fiduciary duty to its funds, by sharing expenses in a manner that improperly benefited one fund over the other, resulting in a $2.3 million settlement. The firm integrated two portfolio companies and managed them as one, owned by two funds. From 2005 – 2013, the firm allocated expenses […]

SEC Charges Former Hedge Fund Manager

Dear Friends, Yesterday, the SEC announced charges against a former hedge fund manager for taking excess management fees from clients and using the money to remodel his home and buy a Porsche. Additionally, the SEC fined the hedge fund manager’s firm $150,000, for failing to supervise the him, even though the firm expelled him and reimbursed the hedge fund, once […]

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 Enforcement Initiative Focuses on Late Filers of Section 13 and 16 Filings

September 16, 2014 Dear Friends, The SEC charged 28 officers, directors, major shareholders, and 6 publicly traded companies, in connection with its enforcement initiative to “root out repeated late filers” of  ownership reports.  The individuals named in the SEC’s orders failed to promptly report information about their holdings and transactions in company stock. The SEC is focusing on two types […]

SEC Director’s Speech on Important Compliance Issues for RIAs

September 12, 2014 Dear Friends, Yesterday, Norm Champ, Director of the SEC’s Division of Investment Management, gave a speech highlighting important compliance, examination, and enforcement topics for registered investment advisers including:  Presence Exam Initiative: The SEC is nearing completion of its goal of examining 25% of newly registered investment advisers.  Alternative Mutual Funds:  Hedge funds must carefully consider the heightened […]