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Top 20 Regulatory Alerts – 2016

top-20

It has been a busy regulatory year.  Over the course of 2016, we have sent nearly 200 Regulatory Alerts to the investment management community.  We have reviewed them all and present the following list of the most significant Regulatory Alerts of 2016.  Feel free to let us know if you (dis)agree.

 

  1. SEC Filed Record Number Of Enforcement Cases In Fiscal 2016 (10/13/16)
  2. SEC Exam Priorities Letter Focuses on ETFs, Retirement Advice and Private Funds (1/12/16)
  3. SEC’s New Form ADV Will Require Detailed Information on Separately Managed Accounts (8/31/16)
  4. SEC’s Enforcement Director Targets Private Equity (5/18/16)
  5. Massachusetts: Robos Do Not Meet Fiduciary Duties (4/13/16)
  6. Federal Court Rules that CCO Liable for AML Financial Penalties (1/19/16)
  7. SEC Fines 13 Advisers for Failing to Verify Third Party’s Performance (8/29/16)
  8. SEC Awards $700,000 Whistleblower Award to Company Outsider (1/26/16)
  9. Large BD/RIA Fined $1 Million for Cybersecurity Breach (6/9/16)
  10. Founder/CEO Resigns over Compliance Failures (2/22/16)
  11. Fund Administrator Charged/Fined for Causing Client’s Securities Fraud (6/20/16)
  12. Large Audit Firm Got Too Close With Its Clients (9/20/16)
  13. SEC Affirms Industry Bar and Financial Penalties against Chief Compliance Officer  (4/4/16)
  14. SEC Wallops Large Private Equity Firm with $52.7 Million in Penalties (8/24/16)
  15. SEC Chair Acknowledges Compliance Outsourcing (4/20/16)
  16. Supreme Court Expands Insider Trading Liability (12/8/16)
  17. GC/CCO Fined and Barred for Failing to Disclose Unauthorized Use of Funds (7/12/16)
  18. ETF Sponsor Will Pay $20 Million To Settle Charges It Overstated Performance (12/5/16)
  19. SEC Proposes Rule Requiring Advisers to Adopt Business Continuity Plans (6/29/16)
  20. SEC Chair Calls For “Zero Tolerance” Enforcement (11/28/16)

Top 5 Regulatory Alerts – November 2016

 

Top 5

 

Here are our Top 5 Regulatory Alerts for November 2016, ranked by significance.  We have also included the Top 5 most read Alerts (other than Best of the Web and Top 5).

 

Top 5 Regulatory Alerts – November 2016

 

  1. SEC CHAIR CALLS FOR “ZERO TOLERANCE” ENFORCEMENT (11/28/16)
  2. FOREIGN OFFICIAL HIRING PROGRAM RESULTS IN $264 MILLION IN FINES AND PENALTIES (11/21/16)
  3. SEC SUES AUDIT ENGAGEMENT PARTNER FOR IGNORING CLIENT MISCONDUCT (11/1/16)
  4. BD FINED FOR HACK OF THIRD PARTY CLOUD PROVIDER (11/16/16)
  5. RELIANCE ON OUTSIDE PROFESSIONALS DOESN’T MEAN ADVISER WASN’T NEGLIGENT (11/9/16)

  

Most Read – November 2016

  1. BD FINED FOR HACK OF THIRD PARTY CLOUD PROVIDER (11/16/16)
  2. SEC SAYS STOCK-PICKING APP IS AN ILLEGAL SECURITY-BASED SWAP (11/2/16)
  3. SEC SUES AUDIT ENGAGEMENT PARTNER FOR IGNORING CLIENT MISCONDUCT (11/1/16)
  4. SEC CHAIR CALLS FOR “ZERO TOLERANCE” ENFORCEMENT (11/28/16)
  5. UNREGISTERED FUND MANAGER STILL LIABLE FOR BREACH OF FIDUCIARY DUTY (11/11/16)

Top 5 Regulatory Alerts – October 2016

Top 5

Top 5 Regulatory Alerts – October 2016

Here are our Top 5 Regulatory Alerts for October 2016, ranked by significance.  We have also included the Top 5 most read Alerts (other than Best of the Web and Top 5).

 

Top 5 Regulatory Alerts – October 2016

  1. SEC FILED RECORD NUMBER OF ENFORCEMENT CASES IN FISCAL 2016 (10/13/16)
  2. SEC ADOPTS LIQUIDITY RISK MANAGEMENT PROGRAM RULE (10/14/16)
  3. COMPLIANCE OUTSOURCING HAS DOUBLED IN LAST 3 YEARS (10/18/16)
  4. SEC RISK ALERT WARNS ABOUT WHISTLEBLOWER POLICIES AND PRACTICES (10/26/16)
  5. LARGE HEDGE FUND MANAGER AND CEO TO PAY $413 MILLION TO SETTLE BRIBERY CHARGES (10/4/16)

  

Most Read – October 2016

  1. RIA FAILED TO CONDUCT ANNUAL COMPLIANCE REVIEWS AND APPOINTED ADMIN AS CCO (10/7/16)
  2. SEC CHIEF OF STAFF OUTLINES COMPLIANCE CHALLENGES (10/25/16)
  3. MUTUAL FUND FIRM TO PAY NEARLY $22 MILLION TO FIX NAV ERRORS (10/20/16)
  4. LARGE HEDGE FUND MANAGER AND CEO TO PAY $413 MILLION TO SETTLE BRIBERY CHARGES (10/4/16)
  5. ADVISER AGREES TO HIRE EXPERIENCED CCO TO SETTLE COMPLIANCE CHARGES (10/3/16)

Top 5 Regulatory Alerts – September 2016

Top 5

Here are our Top 5 Regulatory Alerts for September 2016, ranked by significance.  We have also included the Top 5 most read Alerts (other than Best of the Web and Top 5).

 

Top 5 Regulatory Alerts – September 2016

  1. LARGE AUDIT FIRM GOT TOO CLOSE WITH ITS CLIENTS (9/20/16)
  2. HEDGE FUND MANAGER FACES INSIDER TRADING AND REPORT FILING CHARGES (9/22/16)
  3. SEC OFFICIAL ENCOURAGES COMPETITIVE WHISTLEBLOWING AND THEIR LAWYERS (9/15/16)
  4. PE FIRM FINED $3.5 MILLION AND REIMBURSES CLIENTS OVER $8 MILLION (9/16/16)
  5. UNDER-RESOURCED COMPLIANCE DEPARTMENT LEADS TO ENFORCEMENT ACTION FOR ILLEGAL CROSS-TRADING (9/27/16)

  

Most Read – September 2016

  1. SEC CHARGES IN-HOUSE GENERAL COUNSEL WITH FAILED DISCLOSURE (9/14/16)
  2. UNDER-RESOURCED COMPLIANCE DEPARTMENT LEADS TO ENFORCEMENT ACTION FOR ILLEGAL CROSS-TRADING (9/27/16)
  3. PRINCIPALS CLOSE SHOP FOR FAILURE TO DISCLOSE INVESTMENTS IN AFFILIATED MUTUAL FUND (9/30/16)
  4. SEC PROSECUTES SECURITIES NEWSLETTER/CHAT ROOM (9/19/16)
  5. LARGE AUDIT FIRM GOT TOO CLOSE WITH ITS CLIENTS (9/20/16)

Top 5 Regulatory Alerts – August 2016

Top 5

Here are our Top 5 Regulatory Alerts for August 2016, ranked by significance.  We have also included the Top 5 most read Alerts (other than Best of the Web and Top 5).

 

Top 5 Regulatory Alerts – August 2016

  1. SEC’s New Form ADV Will Require Detailed Information on Separately Managed Accounts (8/31/16)
  2. SEC Wallops Large Private Equity Firm with $52.7 Million in Penalties (8/24/16)
  3. SEC Fines 13 Advisers for Failing to Verify Third Party’s Performance (8/29/16)
  4. SEC Imposes $340,000 Fine Because Severance Agreements Violated Dodd-Frank Act (8/23/16)
  5. FINRA Proposes Changes to Gift and Non-Cash Comp Rules (8/10/16)

 

 

Most Read – August 2016

  1. SEC Wallops Large Private Equity Firm with $52.7 Million in Penalties (8/24/16)
  2. SEC’s New Form ADV Will Require Detailed Information on Separately Managed Accounts (8/31/16)
  3. SEC Fines 13 Advisers for Failing to Verify Third Party’s Performance (8/29/16)
  4. SEC Imposes $340,000 Fine Because Severance Agreements Violated Dodd-Frank Act (8/23/16)
  5. Private Equity Firm Owned by Large Institutional Manager Fined $2.3 Million (8/25/16)

Top 5 Regulatory Alerts – July 2016

Top 5

Here are our Top 5 Regulatory Alerts for July 2016, ranked by significance.  We have also included the Top 5 most read Alerts (other than Best of the Web and Top 5).

 

Top 5 Regulatory Alerts – July 2016

  1. OCIE Launches Share Class Initiative (7/14/16)
  2. SEC Charges Fund Manager with Manipulating Inputs to Ensure Inflated Valuations (7/28/16)
  3. Failure to Heed Compliance Consultant’s Recommendations Results in Enforcement Action (7/8/16)
  4. SEC Imposes $300,000 Fine for Wrap Program ADV Missteps (7/18/16)
  5. GC/CCO Fined and Barred for Failing to Disclose Unauthorized Use of Funds (7/12/16)

 

 Most Read – July 2016

  1. SEC Charges Fund Manager with Manipulating Inputs to Ensure Inflated Valuations (7/28/16)
  2. GC/CCO Fined and Barred for Failing to Disclose Unauthorized Use of Funds (7/12/16)
  3. Fund-of-Funds Manager Allowed Redemptions Only to Insiders and Favored Clients (7/20/16)
  4. Two RIA Firms Fined/Censured for Failing to Disclose Forgivable Loans from Clearing Brokers (7/19/16)
  5. SEC Imposes $300,000 Fine for Wrap Program ADV Missteps (7/18/16)

 

Top 5 Regulatory Alerts – June 2016

Top 5

 

Here are our Top 5 Regulatory Alerts for June 2016, ranked by significance.  We have also included the Top 5 most read Alerts (other than Best of the Web and Top 5).

 

Top 5 Regulatory Alerts – June 2016

  1. SEC Proposes Rule Requiring Advisers to Adopt Business Continuity Plans (6/29/16)
  2. Dual-Hatted CCO Barred and Fined (6/1/16)
  3. Large BD/RIA Fined $1 Million for Cybersecurity Breach (6/9/16)
  4. Fund Administrator Charged/Fined for Causing Client’s Securities Fraud (6/20/16)
  5. Private Equity Firm Pays Over $3 Million for Multiple Compliance Violations (6/2/16)

 

Most Read – June 2016

  1. Large BD/RIA Fined $1 Million for Cybersecurity Breach (6/9/16)
  2. The Friday List: The 12-Step Cybersecurity Program (6/17/16)
  3. SEC Proposes Rule Requiring Advisers to Adopt Business Continuity Plans (6/29/16)
  4. SEC Sues RIA for Moving Clients into Proprietary Mutual Funds (6/3/16)
  5. Fund Administrator Charged/Fined for Causing Client’s Securities Fraud (6/20/16)

 

 

Top 5 Regulatory Alerts – May 2016

Top 5

Here are our Top 5 Regulatory Alerts for May 2016, ranked by significance.  We have also included the Top 5 most read Alerts (other than Best of the Web and Top 5).

 

Top 5 Regulatory Alerts – May 2016

  1. SEC’s Enforcement Director Targets Private Equity (5/18/16)
  2. Massachusetts Sues Large Custody Bank for Over-Pricing Out-of-Pocket Expenses (5/12/16)
  3. DoL Extracts $10 Million Settlement from Investment Manager (5/9/16)
  4. Survey Reports High CCO Turnover (5/2/16)
  5. BD Fined $17 Million and Compliance Officer Fined and Suspended for AML Monitoring Weaknesses (5/19/16)

 

Most Read – May 2016

  1. Large Investment Manager to Pay $1.5 Million for Failing to Supervise Consultant (5/31/16)
  2. SEC’s Enforcement Director Targets Private Equity (5/18/16)
  3. BD Fined $17 Million and Compliance Officer Fined and Suspended for AML Monitoring Weaknesses (5/19/16)
  4. DoL Extracts $10 Million Settlement from Investment Manager (5/9/16)
  5. SEC Chair Expects ETF Regulation (5/23/16)

Top 5 Regulatory Alerts – April 2016

Top 5

 

Here are our Top 5 Regulatory Alerts for April 2016, ranked by significance.  We have also included the Top 5 most read Alerts (other than Best of the Web and Top 5).

 

Top 5 Regulatory Alerts – April 2016

  1. Massachusetts: Robos Do Not Meet Fiduciary Duties (4/13/16)
  2. ETF Authorized Participant Fined $675,000 (4/5/16)
  3. SEC Chair Acknowledges Compliance Outsourcing (4/20/16)
  4. Firm Principals Prosecuted for CCO’s Wrongdoing (4/28/16)
  5. SEC Affirms Industry Bar and Financial Penalties against Chief Compliance Officer  (4/4/16)

 

Most Read – April 2016

  1. SEC Chair Acknowledges Compliance Outsourcing (4/20/16)
  2. Firm Principals Prosecuted for CCO’s Wrongdoing (4/28/16)
  3. SEC Affirms Industry Bar and Financial Penalties against Chief Compliance Officer  (4/4/16)
  4. SEC Allows Adviser to Purchase Fractional Shares Directly from Client Accounts (4/19/16)
  5. ETF Authorized Participant Fined $675,000 (4/5/16)

 

 

Top 5 Regulatory Alerts – March 2016

Here are our Top 5 Regulatory Alerts for March 2016, ranked by significance.  We have also included the Top 5 most read Alerts (other than Best of the Web and Top 5).

 

Top 5 Regulatory Alerts – March 2016

  1. Chair White Wants More Investment Adviser Examinations and Enforcement (3/23/16)
  2. FINRA Report Targets Robos (3/18/16)
  3. Wrap Sponsors to Pay over $9.5 Million to Settle Share Class and Reverse Churning Charges (3/17/16)
  4. Large Fund Family Receives “Distribution-in-Guise” Wells Notice (3/3/16)
  5. Adviser Ordered to Hire Dedicated CCO (3/8/16)

 

Most Read – March 2016*

  1. Firm Failed to Disclose Deteriorating Financial Condition (3/14/16)
  2. Adviser Failed to Disclose Connection to Broker-Dealer (3/21/16)
  3. SEC Staff Requires Ongoing Market Risk Disclosure Reviews (3/11/16)
  4. Chair White Wants More Investment Adviser Examinations and Enforcement (3/23/16)
  5. Wrap Sponsors to Pay over $9.5 Million to Settle Share Class and Reverse Churning Charges (3/17/16)

 

* No data for Alerts sent prior to March 9