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RIA Failed to Conduct Annual Compliance Reviews and Appointed Admin as CCO

three 3D men as symbol of say, see or hear nothing

The SEC fined and censured a registered investment adviser for failing to conduct annual compliance reviews and appointing a chief compliance officer without relevant experience.  The SEC asserts that the respondent, which registered in 2010, never conducted an annual review of its compliance policies and procedures as required by the compliance rule (206(4)-7).  In fact, according to the SEC, neither the firm nor the CCO were even aware of the requirement.  The SEC also faults the firm for appointing as chief compliance officer an inexperienced administrative assistant who spent most of her time on administrative duties.

OUR TAKE: Compliance programs, at their most fundamental, must include the implementation of effective policies and procedures reasonably designed to achieve compliance with the Advisers Act, the appointment of a qualified and dedicated chief compliance officer, and annual reviews of the compliance program.  The SEC will bring an enforcement action for a weak compliance program even in the absence of any other regulatory violation or client harm.

https://www.sec.gov/litigation/admin/2016/ia-4546.pdf

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