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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November 24, 2020

SEC Settles Charges Against Investment Advisory Firms and Dually-Registered Broker-Dealer and Investment Adviser Firms Related to Sales of Complex Exchange-Traded Products

The SEC recently announced that it has entered into settlement agreements with three investment advisory firms and two dually-registered broker-dealer and advisory firms (the firms) related to the firms’ recommendations to retail investors of certain complex exchange-traded products (ETPs) linked to volatility benchmarks, including exchange-traded notes (ETNs) and exchange-traded funds…

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October 9, 2020

SEC Reaches Settlement with Investment Adviser Regarding Recapture of Waived Fees and Reimbursed Expenses from Money Market Funds

The SEC reached a settlement with a registered investment adviser (Adviser) for making material misrepresentations regarding the expenses paid by four money market funds (Funds) that the Adviser managed, in connection with fund reimbursement of fees and expenses that the Adviser had waived or reimbursed during the period from January…

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July 8, 2020

Registered Fund Adviser and Affiliate Censured and Fined for Violations of Section 12(d)(1)(A) (Fund of Funds Limitations) and Compliance Rules

On July 2, 2020, the SEC entered into a settlement order with an adviser and its foreign affiliate (Order) involving violations of the fund-of-funds ownership restrictions in Section 12(d)(1)(A) of the 1940 Act and the compliance rules contained in Rule 38a-1 under the 1940 Act and Rule 206(4)-7 under the Advisers…

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May 21, 2020

SEC Charges Three Former Audit Firm Partners for Exam Sharing Misconduct

On May 18, 2020, the SEC entered into settlement agreements with three former partners of an independent public accounting firm (Firm) in connection with the partners’ conduct involving improperly receiving and sharing information about internal continuing professional education exams conducted by the Firm. The former partners participated in soliciting or…

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May 4, 2020

SEC Fines Fund Adviser for Overvaluing its Securities and Misleading Performance Disclosures

On April 28, 2020, the SEC fined a fund’s adviser in a consent order (Order) for the adviser’s conduct involving the fund’s overvaluation of its securities and the adviser’s misleading statements about the fund’s performance in shareholder communications. The fund primarily invested in non-agency mortgage-backed securities (NA MBS) and, during…

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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…

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