Broker-dealers

Adviser and Broker-Dealer Issues Play Out in Latest Share Class Settlement

The SEC reached a settlement with a dually-registered advisory firm / broker-dealer that involves the issue of recommending higher-cost share classes of securities to clients when lower-cost share-classes of securities are available. This latest share-class settlement has an added wrinkle in that the firm may have had a conflict of interest because, in its capacity as a broker-dealer, it allegedly received the additional service fee from the purchase of the higher-cost shares.

Advisers: Beware of Loans Provided by Friendly Broker-Dealers

Three settlements issued on the same day concerning the same alleged violation: accepting loans with favorable terms from broker-dealers in exchange for sending business to those same broker-dealers. Sounds like the SEC is sending a message.

Associations and Firms Want SEC/DOL Coordination on Standard of Conduct

More than 90 comments have been received by the SEC to date in response to agency chairman Jay Claytons June 1 call for comments in regard to standards of conduct for investment advisers and broker-dealers. Among the trends emerging from the comments received to date is that the SEC, in coordination with the Department of Labor, create a separate standard of conduct for broker-dealers.

SEC Seeks Updated Assessment on Need for Uniform Standard of Conduct

New SEC chairman Jay Clayton dipped his and the Commissions toe back into the waters of a possible uniform Fiduciary Rule for advisers and broker-dealers. The end result may be a uniform standard of conduct or something else.

Another Wrap Fee Adviser Settles with SEC Over Tradeaway Disclosures

The SEC isnt letting up in its scrutiny of dually registered advisers/broker-dealers, particularly those offering wrap fee programs that result in clients paying unexpected fees for transactions that are "traded away" to other brokers. It settled two such cases a few months back - and on March 13 settled a new one.

Examine Adviser-Broker Relationships for Conflicts of Interest

One hand washes the other, or so the saying goes. Advisers and brokers washing each others hands, though, would be wise to make sure they are not really engaging in what the SEC might label a conflict of interest.

Dually Registered Advisers/Broker-Dealers Face Dual Examinations

The ability to charge both advisory fees and brokerage commissions may seem like a powerful incentive to become a dually registered adviser/broker-dealer, but there are challenges as well. Among them are that dual registrants have to comply with two standards, two sets of regulations, and - perhaps the most problematic - face two sets of examiners, one from the SEC, the other from FINRA.

Examiners Scrutinize Adviser Relationships with Broker-Dealers

Examiners visiting advisory firms spend increasing amounts of their time these days on cybersecurity and other hot topics du jour. But thats by no means how they spend all their time. They also look into advisory firm bread-and-butter practices, not least among them relationships with non-affiliated broker-dealers.

Broker Relationships with Advisers Cannot Get in the Way of Best Execution

Friendships between advisers and broker-dealers should only go so far. The majority owner of a broker-dealer learned this lesson the hard way last month after he allowed a financially troubled adviser who was also a longtime friend to set commission rates for his advisory clients, according to the SEC.

Long and Short: SEC Expects Accurate Data from Advisers

Next time you report trades to brokers, make certain you correctly characterize them. One firm just settled with the SEC for $4.25 million and was forced to admit wrongdoing in regard to the agencys allegations of mischaracterizing long and short sales.

Audio Interviews

How to Read an SEC Enforcement Action

Stern Tannenbaum law firm partner Aegis Frumento on how to get the most from reading an SEC administrative order or court complaint.

Most Important Supreme Court Decisions for Advisers and Funds

Find out the high court decisions from recent years that are likely to affect how advisers and investment companies work from Debevoise partner Robert Kaplan. 

Top 10 Cybersecurity Steps to Take Now

Sutherland law firm partner Brian Rubin shares the most urgent cybersecurity steps for investment advisers.

Top Marketing Problems … and Solutions

Get solutions for the top marketing challenges that advisers face from ACA Compliance Group managing director Kimberly Daly

Watch Out for 5 Cybersecurity Myths

ACA Aponix Director Pascal Busnel on the most common cybersecurity myths that may cause firms to spend resources where they may not be needed.

The Hidden Costs of Non-Compliance

Proskauer law firm partner and former SEC Division of Investment Management deputy director Robert Plaze on why the costs of non-compliance go way beyond an SEC penalty.

CCO Liability: How to Protect Yourself

Find out from Blue Edge Capital CCO Margaret Fretz what chief compliance officers may be liable for and best practices to make sure you are protected.

Ethics or Compliance: Making the Choice

Find out the difference an ethics, rather than a compliance, perspective makes at an advisory firm from former Ethics and Compliance Officer Association COO Timothy Mazur.