July 19, 2022
The SEC settled charges against a registered investment adviser (Adviser) and its Chief Compliance Officer (CCO), in connection with the CCO’s and the Adviser’s failure to effectively implement the Adviser’s compliance policies and procedures, in violation of the Advisers Act. According to the SEC, the CCO failed to respond or responded inadequately to numerous red flags surrounding the outside business activities of one of the Adviser’s investment adviser representatives (IAR). Without admitting or denying SEC findings, the CCO agreed to a 5-year bar from serving in a supervisory or compliance capacity with any broker, dealer, investment adviser, municipal securities dealer, transfer agent, or nationally recognized statistical rating organization; and a $15,000 penalty. The Adviser agreed to a $150,000 penalty.
According to the SEC’s order (Order), the CCO received multiple communications from the Adviser’s regular registered broker-dealer regarding an outside business activity (OBA) being conducted by the IAR from at least February 2020 to June 2021. Despite receiving these communications, the CCO allegedly did not act appropriately to implement the Adviser’s compliance program (Program) including:
In total, the IAR diverted $1.7 million in client assets to his outside business activities. The SEC separately charged the IAR in other proceedings, which can be found here.
The SEC Order can be found here.
November 27, 2024
November 19, 2024
November 12, 2024
November 11, 2024
November 5, 2024
November 4, 2024
November 1, 2024
October 31, 2024
October 24, 2024
October 9, 2024
October 8, 2024
The opinions expressed are those of the author(s) and do not necessarily reflect the views of the firm or its clients, or any of its or their respective affiliates. This article is for general information purposes and is not intended to be and should not be taken as legal advice.
One Battery Park Plaza
New York, NY 10004
Phone (212) 574-1200
Fax (212) 480-8421
901 K Street, NW
Washington, DC 20001
Phone (202) 737-8833
Fax (212) 480-8421
Contact Us
General/Media Inquiries – info@sewkis.com
Legal Recruiting – recruiting@sewkis.com
Staff Recruiting – hr@sewkis.com
© 2024