Its 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.
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.
Make sure your clients - and your firm - are protected when there is change in control of your firm that may result in an assignment.
Dont fall into the trap of thinking you can satisfy clients and the SEC by disclosing partial information about your firms compensatory arrangements. One adviser found this out the hard way when it settled a case for allegedly doing just that.
The advisory contract process for mutual funds is meant to be followed. Advisers and board members cannot ignore parts they dont like.
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 CEOs salary in an attempt to make profits look consistent. Now it is paying the costs of a settlement instead.
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.
A hedge fund manager is the latest to be charged by the SEC in the agencys ongoing prosecution of former executives and others involved in an alleged insider-trading scheme.
A New Mexico jury on November 7 demonstrated the danger of straying from investment advisory agreements.