Investment Adviser Overcharges Clients by $367,000, Charged with Fraud WHAT HAPPENED? On May 28, 2019, the Securities and Exchange Commission charged an investment adviser with overcharging clients by at least $367,000. In 2015 and 2016, Stephen Brandon Anderson, owner and operator of River Source Wealth Management, charged a majority [...]
Use of "May" in Form ADV Deemed Negligent by D.C. Circuit Court WHAT HAPPENED? In April, the D.C. Circuit Court of Appeals in Robare Group, Ltd. v. United States Securities and Exchange Commission ruled against Robare, a registered investment adviser, for failing to properly disclose a fee arrangement with [...]
SEC Adopts Rules and Interpretations Including Form CRS and Regulation Best Interest WHAT HAPPENED? On June 5, 2019, the Securities and Exchange Commission announced the adoption of a package of rules and interpretations intended to increase transparency for retail investors in their relationships with investment advisers and broker-dealers. The [...]
OCIE Warns of Cloud-Based Server Security Risks WHAT HAPPENED? Last week, the Office of Compliance Inspections and Examinations (OCIE) discovered several security risks related to the storage of customer information by broker-dealers and advisers, particularly related to the use of cloud-based servers. The primary risk was found to stem from firms [...]
Form CRS: What You Should Know WHAT HAPPENED? In April 2018, the SEC released a proposed rule which would require investment advisers to provide a relationship summary to prospective clients. Form CRS, or Form 3, is intended to give retail clients simple and straightforward information about investment advisers, written [...]
FINRA Cites "Unreasonable" Email Review - Firm Fined, Censured WHAT HAPPENED? On April 12, 2019, the Financial Industry Regulatory Authority (“FINRA”) issued a settlement with a Salt Lake City-based broker-dealer, Wilson-Davis & Company (“Wilson-Davis”), due to poorly designed and implemented email review procedures. The misconduct was observed January-August 2013 [...]
FINRA's 2019 Entitlement User Accounts Certification WHAT HAPPENED? The FINRA Entitlement Program requires an annual review and certification of user accounts to ensure that all persons with access to FINRA applications are approved to do so. The review specifically evaluates that users have an ongoing need to access FINRA [...]
OCIE Warns Advisers and Broker-Dealers of Regulation S-P Compliance Issues WHAT HAPPENED? On April 16, 2019, the Office of Compliance Inspections and Examinations (“OCIE”) published a list of compliance issues in connection with Regulation S-P. Regulation S-P requires registered investment advisers, investment companies, and broker-dealers (“registrants”) to provide notice [...]
SEC Officials Comment on Evolving Proxy Voting Process WHAT HAPPENED? In remarks during the ICI Mutual Funds and Investment Management Conference, SEC Commissioner Elad Roisman and Director of the Division of Investment Management, Dalia Blass, spoke on the future of the proxy voting process. Blass announced that, in 2019, [...]
Reminder: Annual Brochure Delivery Obligation WHAT HAPPENED? Reminder: for Advisers with fiscal year-end Dec. 31, the annual brochure delivery deadline is approaching on April 30. The Adviser Act regulation (Section 275.204-3) states that Advisers must distribute, to each client and prospective client, brochures containing all information required by Form [...]