The SEC this month filed a brief in the U.S. Supreme Court that may make the difference between whether it can continue to request that courts impose disgorgement against defendants or whether it can no longer do so. If the Commission loses the argument before the high court, the ramifications are likely to be significant, not only for the SEC and those it regulates, but for other federal agencies, as well.
The owner of both an advisory firm and a broker-dealer found himself in federal court after the SEC filed charges that he and his advisory firm invested their clients in a version of a security that charged significant transactional sales charges - most of which the broker-dealer allegedly pocketed - when the identical security was available without these costs.
It was perhaps inevitable, given the divisions over the SECs adoption of Regulation Best Interest. Eight attorneys general, representing seven states and the District of Columbia, this month filed suit in federal court, asking, among other things, that the Rule be tossed. The states – New York, California, Connecticut, Delaware, Maine, New Mexico, Oregon – […]
An adviser and his companies are facing charges in federal court from the SEC that they deceived eight clients to invest more than $3 million without disclosing a conflict of interest that allegedly led them to lose approximately $640,000 in principal, as well as untold amounts of lost interest. The charges, filed as part of […]
The SECs focus on advisers placing clients in certain higher-fee mutual fund share classes when less expensive share classes of the same investment are available shows no sign of abating – as evidenced by the agencys August 29 complaint in federal court charging a dually registered adviser with doing just that. Denver-based advisory firm Cetera […]
One of the SECs perennial targets is advisers charging excessive fees – and then failing to disclose those fees to its clients or funds. In a complaint this month in federal court, the SEC charged an advisory firm to private venture capital funds and its owner with doing both. California-based Frost Management Company and its […]
Two hot buttons for the SEC are conflicts of interest and advisers or broker-dealers acting without proper registration. Advisers would be wise to take a lesson from a new agency settlement that revolves around both of these issues. The SEC recently settled charges with Alaska-based advisory firm Foundations Asset Management and two of its principals […]
The SEC this month charged a large Massachusetts-based advisory firm with conflicts of interest over its alleged failure to disclose to clients ways in which it benefitted at their expense. The enforcement action is an example of the agency cracking down on both share class violations and improper revenue sharing. Commonwealth Equity Services, a dually […]
Advisers and their attorneys face a problem when the SEC acts on a settlement offer but holds off on granting related waiver requests - leaving them in the position of having to decide whether to accept a settlement without knowing whether needed waivers are forthcoming. Those facing agency enforcement will likely be happy to know that SEC Chairman Jay Clayton this month came down on the side of simultaneous resolution of both.
The SEC has been buffeted by several court decisions in recent years - Kokesh in 2017, Lucia in 2018, Robare and Lorenzo this year. At least two of these had a negative impact on how the agencys Division of Enforcement operates, while one can be seen as enhancing the Divisions enforcement authority. SEC Chairman Jay Clayton, in a recent speech, described his thoughts about these decisions and how the SEC intends to move forward.