April 30, 2010

About The 40 Act Blog

  The 40 Act Blog is a blog published by Seward & Kissel LLP that reviews regulatory events of interest to attorneys, compliance officers, executives and other participants in the investment management industry.   If you have any questions regarding The 40…

Continue reading...

April 29, 2010

Commissioner Aguilar Speaks on Fiduciary Standard

SEC Commissioner Luis Aguilar spoke at the Investment Adviser Association Annual Conference in Chicago, Illinois on regulatory reform, including whether broker-dealers should be held to a fiduciary standard.

Continue reading...

April 27, 2010

No-Action Letter Allows Adviser to Continue to Serve as Investment Adviser to ETFs Pursuant to a Contract Not Approved by Shareholders

The SEC staff granted no-action relief from Section 15(a) of the Investment Company Act of 1940 (1940 Act) to Claymore Advisors, part of the Claymore Group fund complex, allowing it to continue to serve as investment adviser to certain series Funds of Claymore Exchange-Traded Fund Trust and Claymore Exchange-Traded Fund Trust 2 (together, the Trusts), even though Claymore Advisors would serve in such capacity pursuant to a written investment advisory agreement that had not been approved by the shareholders of the ETF Trusts.

Continue reading...

April 24, 2010

SEC’s Division of Investment Management Director Speaks on History of the Investment Company Act and Investment Advisers Act

Andrew "Buddy" Donohue, the Director of the SEC's Division of Investment Management, spoke in Denver, Colorado about his Division's recent initiatives and industry's developments.

Continue reading...

April 21, 2010

Schwab Settles Mutual Fund Case Related to Sub-Prime Mortgages

Charles Schwab Corp. agreed to pay $200 million to shareholders of the Schwab YieldPlus Fund ("Bond Fund") who had filed class action suits (later consolidated) against the company between March and May 2008.

Continue reading...

April 20, 2010

Staten Island Adviser Charged with Running an Internet Scam

The SEC charged Gryphon Holdings Inc., a Staten Island, New York based investment advisory firm, and its owner Kenneth E. Marsh, as well as several Gryphon associates with operating an Internet-based scam that misled investors into paying fees for phony stock tips and investment advice from fictional trading experts.

Continue reading...

April 16, 2010

Commissioner Aguilar Speaks on Systemic Risk

SEC Commissioner Luis Aguilar spoke at the ABA Systemic Risk Panel in New York on the topic of systemic risk, including the definition of systemic risk, the relationship between primary regulators and any systemic regulator, and the danger of regulatory discretion becoming a substitute for regulatory reform.

Continue reading...

April 16, 2010

SEC Denies 13(f) Request for an Exemptive Order

The SEC declined to issue an exemptive order to Wynnefield Capital Management LLC and Wynnefield Capital, Inc. (Wynnefield), which are investment managers of certain private investment companies, that would have kept certain information filed in a Form 13F filing confidential.

Continue reading...

April 15, 2010

SEC Charges California-Based Investment Adviser for Operating a Fraudulent Scheme

The SEC charged Richard H. Nickles of Dana Point, California, and his three companies, Innovative Advisory Services, Inc., Innovative Advisory Services LLC, and Island Trader LLC, all of which operate from Santa Ana, California, with engaging in a fraudulent advisory scheme.  The SEC alleged that since March 2009, Nickles had raised approximately $3 million through advertisements in prominent newspapers for investments that were purportedly insured or U.S. Government guaranteed. In reality, the SEC stated that Nickles did not invest the funds as promised.

Continue reading...

April 13, 2010

Adviser Charged with Making Misrepresentations

The SEC charged Haberman Management Corp. (HMC), a former registered investment adviser based in New York, New York, Haberman Value Fund, L.P. (HVF) and Ross L. Haberman with violating the anti-fraud provisions of the Securities Exchange Act of 1934 (Exchange Act) and the Investment Advisers Act of 1940 (Advisers Act).

Continue reading...