August 30, 2013

Adviser Charged with Causing Clients to Pay Inflated Fees

The SEC charged GEI Financial Services, Inc., Norman Goldstein and Laurie Gatherum with taking over $147,000 in excessive fees and capital withdrawals from their advisory client, the GEI Health Care Fund 2001, L.P., an unregistered hedge fund. GEI allegedly never told their advisory clients that the State of Illinois revoked…

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August 30, 2013

SEC Pays Whistleblower Award in Connection with Hedge Fund Enforcement Action

The SEC stated that three whistleblowers will be awarded at least $125,000 combined for tips and information they provided to help the SEC and Justice Department stop a sham hedge fund. The three whistleblowers were rewarded with 5% of the money that the SEC ultimately collects from its enforcement action…

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August 27, 2013

Portfolio Manager Charged with Violating Code of Ethics and Misleading CCO

The SEC sanctioned Carl Johns of Louisville, Colorado, a former portfolio manager of a closed-end fund at a Boulder, Colorado-based investment adviser, for forging documents and misleading the firm's CCO to conceal his failure to report personal trades. It is the SEC’s first enforcement action under Rule 38a-1(c) under the 1940 Act for misleading and obstructing a CCO.

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August 21, 2013

SEC Brings 15(c) Action Against an Adviser to an Investment Company

The SEC brought an enforcement actions against Chariot Advisors LLC and Elliott L. Shifman, both located in North Carolina, for misleading the Board of Directors of a mutual fund that the firm advised. The SEC alleges that Mr. Shifman in two presentations misled the Board about the nature, extent, and quality of services that his firm could provide. According to the SEC, he touted his firm’s ability to conduct algorithmic currency trading so the Board would approve the firm's contract to manage the fund.

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August 21, 2013

Adviser Charged with Engaging in Unlawful Affiliated Transactions

The SEC brought an administrative action against David B. Welliver that bars him from association with any broker, dealer, investment adviser, municipal securities dealer, municipal advisor, transfer agent, or nationally recognized statistical rating organization.

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August 20, 2013

Jarcho Named Head of SEC’s Investment Adviser/Investment Company Examination Program

The SEC named Jane E. Jarcho as the National Associate Director of the Investment Adviser/Investment Company examination program in the Office of Compliance Inspections and Examinations (OCIE). She will oversee a staff of approximately 450 lawyers, accountants, and examiners responsible for inspections of U.S.-registered investment advisers and investment companies. Ms. Jarcho has been the Acting National Associate Director of the Investment Adviser/Investment Company (IA/IC) exam program since March. She joined the SEC in 1990 and previously served as the Associate Director of the IA/IC examination program in the SEC's Chicago regional office.

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August 16, 2013

Business Continuity and Disaster Recover Guidance Issued by Federal Agencies

Several federal agencies and SROs including the SEC, CFTC and FINRA issued a staff advisory on business continuity and disaster recovery planning. The advisory encourages firms to review their business continuity plans so as to improve responses to and reduce recovery time after significant large-scale events.

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August 15, 2013

CFTC and SEC Harmonize Disclosure Requirements Applicable to Dually Registered CPOs/Mutual Fund Investment Advisers

The CFTC adopted a final rule with respect to certain compliance obligations for commodity pool operators (CPOs) of investment companies registered under the Investment Company Act of 1940 (1940 Act). Many investment companies now are required to register as CPOs due to the recent changes to Commission Regulation 4.5 that limit the availability of that exclusion.

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August 15, 2013

SEC Appoints Stein as Commissioner

Kara M. Stein became an SEC Commissioner, replacing  former Commissioner Elisse Walter.  Ms. Stein previously was Legal Counsel and Senior Policy Advisor to Senator Jack Reed. From 2009 to 2013, she was Staff Director of the Senate Banking, Housing, and Urban Affairs Committee’s Subcommittee on Securities, Insurance, and Investment. Ms. Stein was Legal Counsel and Senior Policy Advisor to Senator Reed from 2007 to 2009 and served as both the Majority and Minority Staff Director on the Banking Committee’s Subcommittee on Housing and Transportation from 2001 to 2006. She served as Legal Counsel to Senator Reed from 1999 to 2000, following two years as a Legislative Assistant to Sen. Chris Dodd.

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August 15, 2013

SEC Appoints Piwowar as Commissioner

Michael S. Piwowar became the latest SEC Commissioner.  He replaced former Commissioner Troy Paredes, who stepped down earlier this month. Dr. Piwowar previously was the chief Republican economist for the U.S. Senate Committee on Banking, Housing, and Urban Affairs under Senators Mike Crapo and Richard Shelby.  He worked on the Dodd-Frank Wall Street Reform and Consumer Protection Act, the Jumpstart Our Business Startups (JOBS) Act, and on SEC-related issues overseen by the Committee, including market structure, capital formation, investor protection, and the regulation of securities and over-the-counter derivatives.

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