RIA Compliance BlogHighlighting the importance of properly handling clients’ personal information and complying with applicable fiduciary obligations, the Securities and Exchange Commission (SEC) reached a settlement last month that resulted in a final judgment brought against Parker Terrill Austin (“Austin”), an investment adviser based in California and founder of his advisory firm, Embarcadero Capital Advisors, Inc. (“Embarcadero”). The SEC filed its complaint in the U.S. District Court for the Central District of California on September 10, 2025.
Articles Tagged with SEC
SEC Risk Alert Highlights Economic Conflicts of Interest: What RIAs Need to Know
The SEC Division of Examinations issued a Risk Alert earlier this month detailing examination observations related to investment adviser economic conflicts of interest. The alert serves as a reminder that the SEC continues to prioritize the review of compensation arrangements, revenue-sharing programs, fee practices, and disclosure obligations during adviser examinations.
For registered investment advisers (RIAs), the message is clear: firms should review their disclosures, billing practices, and compliance programs to ensure they adequately address conflicts that could influence recommendations made to clients. Continue reading ›
SEC Releases Risk Alert Regarding Investment Adviser Testimonials
On December 16th, the SEC released a Risk Alert containing observations of investment advisers’ compliance with Rule 206(4)-1 (the “Marketing Rule”). The Commission provides risk alerts such as this to inform and remind investment advisers and stakeholders of advisers’ compliance requirements. Regarding testimonials and endorsements, the Commission observed common deficiencies in the following requirements: (1) clear and prominent disclosures, (2) disclosure of material terms of compensation arrangements, (3) disclosure of material conflicts, (4) oversight and compliance, (5) ineligible persons, and (6) promoter affiliated with the adviser. Continue reading ›
SEC Charge Investment Advisers with Misrepresenting AUM
Highlighting the importance of investment advisers’ proper calculation of assets under management (“AUM”), the SEC recently charged six investment advisers with misrepresenting their AUM.
The six connected firms, Bluesky Eagle Capital Management Ltd., Supreme Power Capital Management Ltd., AI Financial Education Foundation Ltd., AI Investment Education Foundation Ltd., Invesco Alpha Inc., and Adamant Stone Limited, were allegedly deficient in several areas, including claiming incorrect business addresses and falsely claiming to be public companies. AUM reporting, however, was the primary offense, as the cause of action was “making material misrepresentations in their SEC-filed Forms ADV that could not be substantiated.” While the advisers were allegedly engaged in several blatant forms of violative conduct, the SEC’s focus on their AUM misrepresentations underscores the importance of advisers’ proper calculation of AUM. Continue reading ›
SEC Division of Examinations Announces 2026 Exam Priorities
On November 18, 2025, the SEC Division of Examinations announced its 2026 examination priorities. Each year, the Division releases its annual examination priorities to (1) inform investment advisers, broker-dealers, and investors of the Division’s upcoming points of emphasis and (2) provide a roadmap for firms to effectively direct their compliance attention.
Regarding investment advisers, the Division’s examination priorities are:
Regulators Postpone and Withdraw Proposed Rules Impacting Investment Advisers
Both the SEC and the U.S. Department of the Treasury’s Financial Crime Enforcement Network (“FinCEN”) recently announced actions to delay or remove pending regulations that would have increased compliance obligations for RIAs. FinCEN announced that it was postponing the effective date of final rules regarding investment advisers’ obligations under anti-money laundering (“AML”) regulations. The SEC announced that it was withdrawing the proposed cybersecurity risk management rule for RIAs, investment companies, and BDCs. Continue reading ›
Minnesota RIA Charged with Cherry-Picking
The SEC recently settled cherry-picking charges against a Minnesota investment adviser and its sole owner. North East Asset Management Group and its owner, Gregory Zandlo, settled the Commission’s claims without admitting or denying its findings.
The SEC found that, through his firm, Mr. Zandlo shifted profitable trades to certain accounts from December 2020 through May 2022. Specifically, the SEC claimed the defendants were shifting profitable trades to accounts belonging to the firm, Mr. Zandlo, or people related to Mr. Zandlo (collectively, “Favored Accounts”). Continue reading ›
IAA Urges RIA Rule Changes in Letter to SEC Chairman
On May 1st, the Investment Adviser Association (IAA), sent a letter to the SEC’s new Chairman, Paul Atkins. The IAA is a nonprofit advocacy organization representing the interests of registered investment advisers.
The IAA’s letter essentially acts as a call to action for the Commission’s new regime. In the letter, the IAA’s President and CEO, Karen Barr, applauds then-Acting Chairman Mark Uyeda’s pivot from the “one-size-fits-all” approach of former Chairman Gary Gensler.
Barr continued to outline eight major recommendations: Continue reading ›
SEC Cites Three Advisers for Failure to Timely Audit Private Funds
Custody presents a compliance danger for investment advisers, including advisers to private funds. Three recent enforcement cases illustrate the importance of diligent compliance for fund advisers with custody of client assets.
According to the Advisers Act, an investment adviser has custody of client assets if it holds, directly or indirectly, client funds or securities, or if it has the authority to obtain possession of those assets. See Advisers Act Rule 206(4)-2(d)(2). Continue reading ›
SEC Announces Examination Priorities for 2025
The SEC recently announced its annual Examination Priorities for the 2025 year. This annual release provides insight into the areas that the SEC plans to highlight when inspecting investment advisers, investment companies, broker-dealers, and other entities subject to examination by the SEC’s Division of Examinations. For investment advisers, the 2025 priorities largely are unchanged from the announced 2024 priorities, which we have previously discussed.
For FY25, the SEC again intends to focus on investment advisers who have never been examined, newly registered investment advisers, and investment advisers who have not been examined recently.