April 29, 2014

SEC Chairman White Testifies Before Congressional Committee on Various SEC Initiatives and Proposed Budget

SEC Chairman White testified before the Financial Services of the U.S. House of Representatives about the SEC’s agenda, operations and budget request. She began her testimony by reviewing the growth of the securities and asset management industries. She next reviewed the accomplishments of the SEC over the past year. Chairman White noted the launch of a powerful new analytical tool called MIDAS (Market Information Data Analytics System), which enables the SEC to analyze enormous amounts of trading data across markets almost instantaneously.

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April 16, 2014

SEC Proposes Swap Recordkeeping and Reporting Rules

The SEC proposed the last set of rules for swaps as required by the Dodd-Frank Act. The proposed rules cover recordkeeping, reporting, and notification requirements for security-based swap dealers and major security-based swap participants and would establish additional recordkeeping requirements for broker-dealers to account for their security-based swap activities.

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April 15, 2014

Cybersecurity Risk Alert Posted by the SEC

OCIE issued a Risk Alert providing additional information concerning its initiative to assess cybersecurity preparedness in the securities industry. The Risk Alert provides a sample list of requests for information that OCIE may use in conducting examinations of registered entities regarding cybersecurity matters. Some of the questions track information outlined…

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April 8, 2014

Hawaiian Adviser Fraudulently Raises Assets through a Web Site

The SEC brought an enforcement action against Keiko Kawamura of Honolulu, Hawaii for fraudulently raising assets from subscribers to a web site and investors in a hedge fund she allegedly managed. The SEC found that she engaged in two separate fraudulent schemes in connection with the purchase and sale of…

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April 3, 2014

Transamerica Financial Advisors Failed to Give Advisory Fee Discounts Even After a Warning from OCIE

The SEC brought an enforcement action against Transamerica Financial Advisors, Inc. (“TFA”), a registered investment adviser and broker-dealer, for failing to apply advisory fee discounts to certain retail clients in several of its advisory fee programs. The programs involved were the Advantage Program, Capital Program, and Sterling Program. TFA offered clients in these programs breakpoint discounts that reduce the total advisory fee as the clients’ assets in the programs increase. In various Form ADV Part 2 filings and in account opening documents, TFA represented that clients may request that TFA aggregate the values of certain related accounts to achieve these discounts. In addition, TFA’s policies and procedures required that clients receive the savings from breakpoint discounts. Despite these disclosures, from January 2009 to June 30, 2013, TFA failed, in certain instances, to apply the breakpoint discounts despite client requests for aggregation. TFA also failed to adopt and implement adequate policies and procedures to ensure that its clients’ fees were calculated as represented.

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April 2, 2014

SEC Commissioner Aguilar Speaks on Issues Confronting the Mutual Fund Industry

SEC Commissioner Luis Aguilar spoke at a Mutual Funds Directors Forum event in Washington, D.C., about mutual fund industry issues. He began by reviewing the history of the SEC’s regulation of mutual funds. During that discussion, he spoke about recent developments at the SEC including several enforcement actions involving mutual funds.

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