Providing securities and derivatives regulatory updates for investment management industry participants
Cybersecurity has been a key priority for the SEC and its Office of Compliance Inspections and Examinations (OCIE) in recent years. The OCIE regularly releases publications addressing cybersecurity risks and practices, including eight risk alerts related to cybersecurity since 2012.
In the latest example, OCIE recently published its Cybersecurity and Resiliency Observations Report, describing 34…
On March 11, 2019, the SEC announced settlements with 79 investment advisers who self-reported violations of the Investment Advisers Act of 1940 (the “Advisers Act”) in connection with the Division of Enforcement’s Share Class Selection Disclosure Initiative (the “Share Class Initiative”). The advisers, collectively, agreed to return more than $125 million in fees and prejudgment…
The end of 2018 was notable for two SEC enforcement actions against private equity fund managers for violations of the Investment Advisers Act of 1940 arising from improper allocations of expenses, undisclosed conflicts of interest, and insufficient compliance policies and procedures. The two actions demonstrate the SEC’s continued focus on private equity fund managers’ use…
The SEC’s Office of Compliance Inspections and Examinations (OCIE) published its 2019 examination priorities on December 20, 2018. Although OCIE’s published priorities “provide a preview of key areas where OCIE intends to focus its limited resources,” registrants should be aware that OCIE will proactively seek insight into evolving markets “including changes in risks to markets…
Until yesterday, the enforcement actions of the U.S. Securities and Exchange Commission (SEC) in the digital token (aka cryptocurrency) space have primarily focused on the primary issuances of tokens. However, on November 8, 2018, the SEC announced in an order (the “Order”) that it had settled charges against Zachary Coburn, the founder of the digital…
On October 12, 2018, the staff of the SEC’s Division of Investment Management issued a no-action letter to the Independent Directors Council (“IDC”) agreeing that the staff will not recommend enforcement if, in lieu of making certain determinations under Rule 10f-3, 17a-7 and 17e-1 (the “Exemptive Rules”) under the Investment Company Act of 1940 (the…
In a recently settled enforcement matter, the SEC imposed a $1 million penalty on an investment adviser based on findings that the adviser violated the Investment Advisers Act of 1940 (the “Advisers Act”) and caused violations of the Investment Company Act of 1940 (the “Investment Company Act”). The charges stemmed from inappropriate cross trading and…
