Advisers

FYI: Ransomware Risk Alert Issued

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FYI: The SEC’s Office of Compliance Inspections and Examinations (OCIE) has issued a cybersecurity Risk Alert in the wake of the recent ransomware attacks around the globe. The Alert recounts the results of 75 recent examinations of industry firms relative to cybersecurity, noting that a wide range of practices were observed. BDs in general appeared to be more prepared than advisers and funds in each of the areas of cyber risk assessment, penetration testing and system maintenance. Noting that it is not possible to anticipate and prevent all types of cyber events, the Alert emphasizes the importance of appropriate planning, […]

Advisers

FYI: $97 Million Enforcement Settlement

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FYI: The SEC settled an enforcement action against Barclays Capital based on a number of alleged violations. The settlement amount totals over $97 million, which includes direct refund of overcharged fees, Fair Fund disgorgement plus interest, and a $30 million penalty. The SEC’s order found violations in three categories: –Misrepresentations about the due diligence monitoring that Barclays would do on third-party managers in a wrap program offered to clients, saying in substance they were doing due diligence on certain managers when they were not. –Overcharging of fees resulting from inaccurate valuations and erroneous calculations. –Placing clients in mutual fund share […]

Advisers

FYI: SEC Brings Distribution-in-Guise Enforcement Action

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FYI: The SEC has settled an enforcement action against the adviser and affiliated distributor to a large mutual fund complex. This appears to be another “distribution-in-guise” case, where a mutual fund pays for services to effect distribution of its shares outside of a required 12b-1 plan, but discloses, reports or treats the payments as having been made for something else, such as sub-transfer agency services. According to the SEC’s order in this case, distribution payments were inaccurately reported to the funds’ Board as sub-TA payments, and the funds’ prospectus inaccurately stated that distribution payments made in excess of the 12b-1 […]

Advisers

FYI: Jay Clayton Sworn in as SEC Chairman

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FYI: Jay Clayton was sworn in today as the new Chairman of the SEC. Clayton has spent the last 20 years as a New York securities lawyer, advising public and private companies on securities offerings, M&A, corporate governance and regulatory and enforcement proceedings, among other things. He also has experience counseling on capital raising and trading matters in the U.S. and abroad, including while resident in Europe for five years. Notably absent from Clayton’s bio is any mention of experience handling regulatory matters relating to investment advisers, investment companies, broker-dealers or other entities in the financial services industry. Clayton (a […]

Brokers

FYI: 2017 BD Compliance Outreach Announced

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FYI: Today the SEC and FINRA announced that the 2017 National Compliance Outreach Program for Broker-Dealers will be held on July 27 at the SEC’s headquarters in Washington DC. Registration for in-person attendance is available on the SEC’s website, along with the agenda covering cyber, seniors and retirement accounts, conflicts, AML, recidivism, dual registrants and other hot topics. The event will be live webcast. SEC Announcement: https://www.sec.gov/news/press-release/2017-91. * * *