Now that you’ve seen what ACA Insight has to offer, don’t be without it. Subscribe now!

The weekly news source for investment management legal and compliance professionals

Current subscribers - please log in to the website in the upper right-hand corner

OIG to SEC: Improve Information Security, Regulatory Oversight, Contract Management

When it rains, it pours. A little more than two weeks after the SEC began dealing with the public fallout from the cyber breach of one of its key electronic systems, its Office of the Inspector General issued its annual statement on the agency’s management and performance challenges. While the statement identified some progress the SEC made in addressing these challenges, it found significant areas for improvement.
Continue Reading

Recent Stories

SEC Cyber Breach Resulted in Access to Personally Identifiable Information

At least two individuals had their names, dates of birth and social security numbers accessed by third parties as a result of the SEC’s 2016 cyber breach, Commission chairman Jay Clayton disclosed October 2. His disclosure also left open the possibility that the agency’s internal review might uncover more individuals with accessed personally identifiable information.
Continue Reading

Platinum Settlement Lesson: Disclose Before Allocating Broken Deal Expenses

Private equity fund advisers would be wise to take note of the SEC’s recent settlement with Beverly Hills-based Platinum Equity Advisors. The large advisory firm, with approximately $13.4 billion in assets under management, paid more than $3.4 million to settle charges that it allocated undisclosed broken deal expenses to three of its private equity fund clients.
Continue Reading

Settlement Shines New Light on Old Practice of Scalping

With ever-more sophisticated securities transactions seemingly becoming the norm, the SEC increasingly relies on its own high-tech abilities to identify fraud. Elaborate new ways of investing and transacting should not, however, distract compliance departments from monitoring their firms for some of the most basic kinds of fraud. The practice known as "scalping" is a case in point.
Continue Reading

After the Cyber Breach: SEC Faces Questions, Clayton Testifies, Effect on the CAT

The asset management industry, including the SEC, is weighing the impact of the cybersecurity breach that agency chair Jay Clayton recently disclosed to the public (ACA Insight, 9/25/17). In the wake of the disclosure, the SEC announced a new initiative, Clayton testified before a Senate committee, and industry leaders and observers speculated as what it all might mean for future regulation and oversight, including the launching of the agency’s Comprehensive Audit Trail (CAT).
Continue Reading

SEC Work with DOL on Standards of Conduct Already Underway

SEC chairman Jay Clayton’s testimony before a Senate committee was not limited to cybersecurity. He also used his September 26 testimony before the Senate Committee on Banking, Housing and Urban Affairs to address other topics, including developing standards of conduct for advisers and broker-dealers – and let Congress and the public know that collaboration with the Department of Labor on these standards has already begun.
Continue Reading

12b-1 Fees: SEC Settles Share Class Charges with Two More Advisers

If you think the SEC only occasionally charges advisers for placing clients in expensive share classes when less expensive classes are available, recent events should change your mind. The agency reached settlements with two advisory firms involving share classes just last month, and those followed up on still other settlements and developments earlier this year and the year before.
Continue Reading

Advertising Rule Violations: OCIE Lets Advisers Know Which Get Cited Most

Advisers now have even less of an excuse for violations of Rule 206(4)-1, the Advertising Rule, than they did before. With the Office of Compliance Inspections and Examinations’ issuance of a risk alert listing the most frequent Advertising Rule compliance issues identified during examinations, the agency is leaving little doubt as to what may constitute a violation.
Continue Reading

Examiners and Enforcement Division Keep an Eye on the Fees and Expenses Ball

Fees and expenses, and how advisers allocate them, constitute much of what compliance is about. While some compliance officers may consider fee and expense allocation among the most basic of compliance practices, they should avoid the trap of thinking they have it covered, when in fact, they may not. Nor should they be lulled into believing that agency examiners and investigators don’t look for such violations, when, in fact, they do. This may be particularly true with private fund advisers.
Continue Reading