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.
February 5, 2018
Last week, the SEC instituted cease-and-desist proceedings pursuant to Section 203(k) of the Investment Advisers Act against Gemini Fund Services for its calculation of an inflated NAV when it was aware of inconsistencies with the custodian bank’s records.
March 31, 2017
The SEC recently settled charges against an investment adviser (the "Adviser") for failing to disclose to its clients compensation it received through arrangements with a third-party broker-dealer (the "Broker") and the resulting conflicts of interest.
December 20, 2016
Two recent settlements between investment advisers and the Securities and Exchange Commission (“SEC”) demonstrate the importance of correctly valuing bonds within a fund’s portfolio and ensuring that the valuation methods used take into account all factors that affect a bond’s value. Failure to do so can result in an inflated NAV, which can lead to disgorgement, heavy penalties and shareholder reimbursements.
September 26, 2016
The Securities and Exchange Commission ("SEC") recently announced that it settled charges with two investment advisory firms related to compliance failures within their wrap fee programs. For violations of Section 206(4) of the Investment Advisers Act of 1940 and Rule 206(4)-7 thereunder, the firms agreed to pay penalties of $600,000 and $250,000, respectively.
August 31, 2016
Investment Adviser Settles Charges of Failing to Disclose Key Terms in Application for Exemptive Relief
The Securities and Exchange Commission (“SEC”) recently announced its settlement of charges against a registered investment adviser (the “Adviser”) for failing to disclose material terms in, among other documents filed with the SEC, an application for exemptive relief. The SEC determined that the Adviser had violated Section 34(b) of the Investment Company Act of 1940, as amended (the “1940 Act”), by not disclosing a side agreement with a subadviser, the terms of which were inconsistent with concerns raised by the SEC’s Division of Investment Management (the “Staff”) in its review of the application.
June 21, 2016
SEC Sanctions Investment Adviser for Failing to Establish and Maintain Policies and Procedures to Prevent the Misuse of Material Nonpublic Information
On May 27, 2016, the SEC sanctioned an investment adviser (the "Adviser") for failing to establish and maintain policies and procedures reasonably designed to prevent the misuse of material nonpublic information.1 Specifically, the Adviser failed to adopt and implement policies and procedures for identifying outside consultants who, based on their functional roles and access to confidential information regarding the Adviser's transactions, should be subject to the Adviser's policies and procedures, including its code of ethics.
June 16, 2016
The SEC announced today that Apex Fund Services (US), Inc. (“Apex”), a fund administrator that provided accounting and administrative services to four private funds managed by ClearPath Wealth Management, LLC (“ClearPath”) and two private funds managed by EquityStar Capital Management, LLC (“EquityStar”) agreed to pay more than $350,000 to settle charges brought by the SEC after it determined that Apex had, in the course of its administrative and fund accounting duties, committed a series of failures and was a cause of Advisers Act violations committed by ClearPath and EquityStar.