On December 21, 2018, the Securities and Exchange Commission issued an Order Instituting Administrative and Cease-and-Desist Proceedings against Hedgeable, Inc., a registered investment adviser. Hedgeable utilizes a “robo adviser” program, which it offers to individuals, small business owners, trusts, corporations, and partnerships through both its website and social media. The…
Following several enforcement actions brought against registered investment advisers that received 12b-1 fees when institutional shares were available to be purchased in clients’ advisory accounts, in February of this year the Securities and Exchange Commission announced an initiative under which firms could self-report the receipt of “avoidable” 12b-1 fees since…
The Department of Labor (DOL) recently proposed a rule revising the definition of “employer” under Section 3(5) of the Employee Retirement Income Security Act of 1974 (“ERISA”) for purposes of sponsoring a multiple-employer plan (MEP). The proposed rule, which is in response to President Trump’s August 31, 2018 Executive Order…
In October 2018, the South Carolina Court of Appeals vacated a $540,000 civil penalty that the South Carolina Securities Commissioner had imposed against John M. McIntyre and his company, Silver Oak Land Management, LLC. The Commissioner imposed the penalty upon a determination that McIntyre and Silver Oak Land Management had…
The SEC’s Office of Compliance Inspections and Examinations (“OCIE”) periodically issues “Risk Alerts” highlighting common deficiencies encountered by its staff during routine investment adviser compliance exams. These Risk Alerts serve the dual purpose of providing advisers with both useful insight into the results of recent OCIE examination activity as well…
The SEC routinely hears appeals arising from FINRA disciplinary proceedings, and in turn issues “Adjudicatory Orders” announcing its decisions. To the extent that these Orders are issued by vote of the full Commission, they stand as highly useful guidance to industry players on the thoughts of the SEC’s ultimate leadership.…
In our previous post regarding state-registered investment advisers, we examined the landscape and discussed common deficiencies found in state adviser examinations. In this post, we will discuss enforcement actions typically aimed at state-registered investment advisers, as well as current enforcement trends such as fraud pertaining to emerging markets and protection…
This is the first of a two-part series dealing with the state-registered investment adviser industry. In this first post we examine the landscape and discuss common deficiencies identified in state adviser examinations. Relevant statistics can be found in the North American Securities Administrators Association’s 2018 Investment Adviser Section Annual Report. …
In October 2018, the United States District Court for the District of South Carolina granted class action certification to Robert Berry, a former financial adviser for Wells Fargo. Berry’s suit against Wells Fargo alleges that Wells Fargo did not pay the class members, other former and current Wells Fargo employees…
On October 30, 2018 the Securities and Exchange Commission announced amendments to rules and forms designed to improve disclosures made to clients regarding variable annuities and variable life insurance contracts. According to the SEC, the purpose of the proposed amendments is to assist investors in comprehending the characteristics of variable…