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The weekly news source for investment management legal and compliance professionals

Topic: Advisory Contracts

Qualified Client Threshold Adjusted

June 24, 2016
It’s just a little adjustment – but a little may make the difference between being able to charge performance fees or not. The SEC on June 14 adjusted the dollar threshold used to exempt an adviser from the prohibition on charging performance fees.

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Proposed Incentive-Based Compensation Rule: Advisers Should Pay Attention

May 19, 2016
The proposed rule issued May 6 by the SEC and five other federal agencies that would prohibit financial institutions from offering incentive-based compensation encouraging inappropriate risk taking should be viewed with concern by at least large investment advisers. While the rule would affect only advisers with more than $1 billion in assets, the way the SEC counts such advisers may mean that some firms that believe they are under the threshold may actually fall within it.

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Assignment: Know the Requirements and Avoid the Pitfalls

January 15, 2016
Make sure your clients – and your firm – are protected when there is change in control of your firm that may result in an assignment.

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Terminate that Advisory Contract the Right Way

December 31, 2015
Keep your client’s interests first – even when terminating an advisory contract. That is, after all, your fiduciary duty. But contracts can be terminated in a way that helps your firm, as well.

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Compensation Arrangements: A Little Bit of Disclosure Does Not Go a Long Way

August 6, 2015
Don’t fall into the trap of thinking you can satisfy clients and the SEC by disclosing partial information about your firm’s compensatory arrangements. One adviser found this out the hard way when it settled a case for allegedly doing just that.

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Advisory Contracts: Don’t Cut Corners on the Approval Process

June 26, 2015
The advisory contract process for mutual funds is meant to be followed. Advisers and board members cannot ignore parts they don’t like.

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Misallocation of CEO Compensation Adds Penalty to Adviser’s Ledger

May 15, 2015
If the charges in an SEC settlement are to be believed, an adviser and its chief financial officer/chief compliance officer attempted to deceive the board of directors of a fund series by misallocating the adviser CEO’s salary in an attempt to make profits look consistent. Now it is paying the costs of a settlement instead.

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Advisory Agreement Case: SEC Files New Charges After $55M Court Win

May 1, 2015
Watch out for those old active advisory contracts. They can come back and bite you. The SEC on April 28 instituted administrative proceedings against adviser Charles Kokesh. The Commission action followed a March 30 final judgment by the U.S. District Court for the District of New Mexico, in which Kokesh was ordered to pay more than $55 million in disgorgement, interest and civil money penalties.

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SEC Ongoing Insider Trading Case Snags a Hedge Fund Manager

December 5, 2014
A hedge fund manager is the latest to be charged by the SEC in the agency’s ongoing prosecution of former executives and others involved in an alleged insider-trading scheme.

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Verdict in $35 Million Theft Case Shows Importance of Advisory Agreements

November 14, 2014
A New Mexico jury on November 7 demonstrated the danger of straying from investment advisory agreements.

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Shareholder Vote Requirement for Aggregate Advisory Fee Rate Changes Confirmed and Clarified

February 28, 2014
The SEC staff last week confirmed that any advisory contract changes to the aggregate advisory fee rate must be put to a vote before mutual fund shareholders. At the same time, the guidance update (No. 2014-3) provided some examples of when such votes would not be required.

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Advisory Contracts: Protect Yourself on Scope of Services, Soft Dollars and More

December 6, 2013


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Adviser That Claimed Algorithmic Trading Ability to Get Contract is Now SEC Target

September 6, 2013


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SEC Adopts Amendments to Performance Fee Rule

February 26, 2012


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Score One For Mandatory Arbitration Clauses In Advisory Agreements

January 11, 2010


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Adviser Sued for Failing to Provide Fund Board With Adequate Information

June 1, 2009


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Donohue: Boards Should Give Extra Scrutiny to 15(c) Reviews This Year

January 16, 2009


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Plaintiffs in Harris Associates Seek U.S. Supreme Court Review

November 7, 2008


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Model RFPs Released

October 17, 2008


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Compliance in the Midst of a Market Crisis

October 10, 2008
Here is a suggested list of steps to take, tests to perform, and risks to evaluate during the current market crisis.

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