March 12, 2020
Broker-Dealer Entities Fined $35 Million for Violations Relating to Inverse ETF Recommendations to Retail Investors
The SEC recently fined two dual registrant broker-dealers $35 million for violations involving inadequate compliance policies and procedures, unsuitable recommendations and failure to supervise arising out of recommendations to certain retail investors that invested in single-inverse ETFs. Single-inverse ETFs are ETFs that seek returns that are the opposite of the…
October 23, 2019
SEC Staff Issues Frequently Asked Questions Regarding Disclosure of Certain Financial Conflicts Related to Investment Adviser Compensation
On October 18, 2019, the SEC staff issued frequently asked questions (FAQ) about required disclosures of conflicts related to compensation advisers receive, such as 12b-1 fees and revenue sharing, for recommending certain investment products. In the FAQ, the staff of the Division of Investment Management discusses…
October 1, 2019
On September 30, 2019, the SEC announced it settled charges against 17 investment advisers for disclosure failures regarding their mutual fund share class selection practices. The firms include 16 advisers that self-reported as part of the Division of Enforcement’s Share Class Selection Disclosure Initiative (Initiative) and one adviser that did…
September 23, 2019
Advisers Fined $5 Million for Disclosure and Compliance Violations Related to Securities Lending and Unreimbursed Tax Expenses for Mutual Fund Clients
On September 16, 2019, the SEC issued a settled order describing violations of the Investment Advisers Act of 1940 (“Advisers Act”) and rules thereunder by two registered advisers for undisclosed conflicts of interest and misleading disclosures relating to certain securities lending practices, and misleading disclosures and deficient policies and procedures…
September 16, 2019
SEC Charges BDC Adviser with Affiliated Transaction Violations and Noncompliance with Co-Investment Exemptive Order
On September 13, 2019, the SEC issued a consent order that named Garrison Investment Group LP (“GIG”) and Garrison Capital Advisers LLC (“GCA”) and found violations of the affiliated transaction prohibitions of the Investment Company Act of 1940 (“1940 Act”) and the custody rule under the Investment Advisers Act of…
September 5, 2019
Two separate complaints filed last month against Cetera Advisors, LLC (“Cetera”) and Commonwealth Financial Network (“Commonwealth”) show that the SEC is still pursuing intermediaries for conflicts of interest and related violations related to fund share class selection. The complaints against Cetera and…
November 15, 2018
SEC’s Office of Compliance Inspections and Examinations Issues Risk Alert Announcing Examination Initiatives Focused on Registered Investment Companies
On November 8, 2018, the staff of the SEC’s Office of Compliance Inspections and Examinations issued a Risk Alert indicating that it is conducting a series of examination initiatives focused on matters relevant to certain mutual funds and exchange-traded funds (ETFs).
October 22, 2018
On September 26, 2018, the SEC announced that it settled charges against a broker-dealer/investment adviser related to its failures to adopt and implement adequate cybersecurity policies and procedures. The failures were identified in connection with a cyber intrusion that compromised personal information of thousands of customers. The firm agreed to be censured and pay a $1 million penalty.
September 18, 2018
Massachusetts Financial Services to Pay a $1.9 Million Civil Penalty for the Use of Misleading Marketing Materials
On August 31, 2018, the SEC announced that it settled charges against Massachusetts Financial Services related to allegations that it failed to disclose that some of its product marketing materials for its blended research equity strategy presented hypothetical back-tested portfolio results.
September 18, 2018
Transamerica Entities to Pay $97 Million to Investors Relating to Errors in Quantitative Investment Models
On August 27, 2018, the SEC announced that it settled charges against four Transamerica-related entities for misconduct involving reliance on faulty investment models and ordered the entities to refund $97 million to misled retail investors.