Trading Desk

Adviser’s Ownership Interest Triggers Principal Trading Settlement

An investment advisory firm and its founder/chief executive officer reached a settlement with the SEC after the agency charged both with principal trading violations. The founder’s ownership interest in a fund his firm managed when the trades occurred was more than 35 percent, the agency said, well above the 25 percent limit mentioned in a recent agency Risk Alert, and apparently triggered the agency investigation.

New OCIE Risk Alert Focuses on Principal Trading and Agency Cross Trading

The SECs Office of Compliance Inspections and Examinations, in a September 4 Risk Alert, lets advisers know the most frequent principal trading and agency cross-transaction compliance issues that examiners observed – and therefore what firms can expect examiners to make a point of looking at during future visits. Specifically, the Risk Alert focuses on compliance […]

SEC Risk Alert on Safeguarding is Good Checklist for Transfer Agent Monitoring

The latest Risk Alert from the SECs Office of Compliance Inspections and Examinations is written to help transfer agents comply with safeguarding requirements, but advisers can make use of it, too.

The CAT Takes a Step Forward and a Step Back

The SEC is finding that its progress in creating a comprehensive electronic blueprint of securities transactions, the Consolidated Audit Trail (CAT), is proving as difficult as getting real cats to do what you want. It issued a statement that demonstrates the forward-and-back nature of this project: the arrival of a detailed master plan, but the delay of three key deadlines by a year.

SEC Keeps its Eye Out for Cherry-Picking as Another Adviser Settles

Its always easier for enforcers to go after the low-hanging fruit, and in the case of the SEC, that fruit happens to be cherries. The agency on August 17 took another step in its ongoing crackdown against cherry-picking, reaching separate settlements with an advisory firm and an investment adviser representative who worked for it.

Trade Pre-Clearance and Blackout Periods: Use Them Wisely

Trade pre-clearance and blackout periods are two reliable methods used by advisers seeking to avoid certain kinds of problems when trading securities or with personal trading. Thats not to say, of course, that these methods dont carry their own problems if not done right.

Restricted Lists: Update, Monitor and Avoid Common Errors

Many advisory firms maintain "restricted lists:" compiled names of companies and securities with which they do not allow trading. These lists protect an advisory firm from a number of dangers - but advisers with such lists need to ensure they are properly updated, monitored and that they avoid mistakes that may cause problems down the road.

F-Squared Founder Ordered to Pay More than $13 Million

The F-Squared Investments saga seems to open or close a new chapter every few months since 2014, when the SEC first brought charges against the advisory firm for allegedly making false and misleading statements about its investment strategy algorithm. The latest development occurred March 22, when a federal judge ordered that F-Squared founder and former CEO Howard Present personally pay $13 million, including a $1.58 million civil money penalty, following his loss at trial this past October.

Follow State Restrictions When Offering Investments to Public Pension Plans

Just because a state allows its public pension plans to place money in types of funds that it had previously not allowed does not mean that advisers should rush in with investments. As with any type of investment, the fine print needs to be read first.

Clayton Rejects Request to Extend CAT Deadline

SEC chairman Jay Clayton on November 14 issued a nuanced statement?rejecting a request from the national securities exchanges and FINRA to delay the initial deadline of the Comprehensive Audit Trail - better known as the CAT - by a year, and other deadlines by a year or more. His decision leaves at least the short-term implementation of the much-discussed high-tech tool up in the air.

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.