May 27, 2022

SEC Settles Charges with Broker-Dealer in Connection with Improper Switching of Variable Annuities

On May 25, 2022, the SEC announced that it settled charges against a registered broker-dealer (Broker-Dealer) in connection with improper switching or replacing of variable annuities for which it was a principal underwriter. Without admitting or denying SEC findings, the Broker-Dealer consented to, among other things, a finding…

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May 25, 2022

SEC Settles Charges with Investment Adviser in Connection with ESG Misstatements and Omissions

On May 23, 2022, the SEC announced that it settled charges against an investment adviser (Adviser) in connection with misstatements and omissions about environmental, social, and governance (ESG) considerations in making investment decisions for certain mutual funds that it managed (Funds). Without admitting or denying SEC findings, the…

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May 23, 2022

SEC Charges Investment Adviser and Three Portfolio Managers in Connection with Multibillion Dollar Securities Fraud

On May 17, 2022, the SEC charged an investment adviser (Adviser) and three former senior portfolio managers in connection with a scheme, conducted over several years, to mislead investors about the significant downside risks of a complex options trading strategy (Strategy) used in seventeen unregistered private funds (Funds),…

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February 25, 2022

U.S. District Court Rules That “Control Share Acquisition” Provision of Closed-End Fund Bylaws Violates the Investment Company Act of 1940

A judge for the U.S. District Court for the Southern District of New York ruled that certain closed-end funds (funds) and their trustees violated the Investment Company Act of 1940 (1940 Act) by approving a change to fund bylaws that impaired the voting rights of the plaintiff shareholder.

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February 24, 2022

Financial Services Company Fined $100 Million and Agrees to Pursue Registration of its Crypto Lending Product

On February 14, 2022, the SEC settled charges against a financial services company (Company) for failing to register the offers and sales of its retail crypto lending product in violation of Sections 5(a) and 5(c) of the Securities Act. In the same settlement order (Order), the SEC settled…

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February 23, 2022

SEC Charges Founder of Registered Investment Adviser with Fraud

On February 17, 2022, the SEC charged the founder and former CIO (Founder) of a registered investment adviser (Firm) in connection with a scheme to artificially inflate the asset values and performance results of a mutual fund and a hedge fund that the Firm advised (Funds), in violation…

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January 12, 2022

Broker-Dealer Fined for Electronic Communication and Recordkeeping Failures

On December 17, 2021, the SEC settled charges against a registered broker-dealer (Broker-Dealer) for certain recordkeeping failures in violation of Section 17(a) of the Exchange Act and Rule 17a-4 promulgated thereunder; and for failures to reasonably supervise its employees with a view to preventing or detecting certain of…

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October 5, 2021

SEC Charges Former Executives of Registered Investment Adviser with Fraud

On September 30, 2021, the SEC charged the former CEO of an advisory firm (Firm), and the Firm’s former chief portfolio manager (PM), for their roles in the Firm’s scheme to artificially inflate the net asset values (NAV) and performance results of several of its funds.

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June 3, 2021

SEC and CFTC File Civil Complaints Against Fund Sponsor and its Portfolio Managers and Enter into Settlement Agreement with Chief Risk Officer on Related Allegations

On May 27, 2021, the SEC and CFTC filed civil complaints against LJM Funds Management Ltd. and LJM Partners Ltd. (each of which is a registered investment adviser and commodity pool operator; collectively, LJM), and two LJM portfolio managers, Anthony Caine and Anish Parvataneni relating to an options…

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December 18, 2020

Pricing Service to Pay $8 Million to Settle SEC Charges

The SEC recently settled charges against a global securities pricing service and registered investment adviser (Pricing Service), for compliance deficiencies relating to its delivery to clients of prices for certain categories of fixed-income securities based on quotes it received from a single market participant (single broker quotes).  According to the…

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