June 8, 2016

SEC Settlement with Morgan Stanley

Morgan Stanley Smith Barney LLC (“Morgan Stanley”), a registered broker-dealer and investment adviser, agreed to pay $1 million to settle administrative proceedings brought by the SEC after it found that, in violation of Regulation S-P, Morgan Stanley failed to adopt written policies and procedures reasonably designed to protect customer records and information. Although Morgan Stanley had established certain policies and restrictions regarding its employees’ access to, and use of, confidential customer data, and implemented certain technology controls designed to prevent employees from copying data onto removable storage devices and from accessing certain websites, the SEC found that the firm failed to ensure that its policies and procedures were reasonably designed and properly operated.

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April 21, 2013

Adviser Fails to Supervise Employee Who Allegedly Forged Checks

The SEC brought an administrative action against Vector Wealth Management, LLC, finding that from October 2008 to May 2011, a clerical employee of Vector forged checks to misappropriate $33,147 of dividends owed to four advisory clients participating in two hedge funds that were managed by Vector.

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April 21, 2013

Adviser Charged with Failing to Implement Adequate Compliance Procedures

The SEC brought an administrative action against Foxhall Capital Management, Inc., based in Virginia, alleging that the firm willfully violated, and its CEO, Co-Chief Investment Officer and CCO willfully aided and abetted and caused Foxhall to violate Section 206(4) of the Advisers Act and Rule 206(4)-7 thereunder by failing to adopt and implement written compliance policies and procedures reasonably designed to prevent violations of the Advisers Act. Foxhall, according to the SEC, also failed to keep complete and accurate records as required by Section 204 of the Advisers Act and Rule 204-2(a)(3) thereunder, and its CCO aided and abetted and caused Foxhall’s violations of these provisions.

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April 18, 2013

Adviser Charged with Misleading Client Regarding Its AUM

The SEC charged the CEO of Chicago-based investment advisory firm Simran Capital Management with lying to the California Public Employers’ Retirement System (CalPERS) and other current and potential clients about the amount of money managed by the firm.

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April 4, 2013

SEC Brings Action Against Adviser and Its Principal Related to Misleading Advertisements

The SEC brought an administrative action against ZPR Investment Management, Inc. (ZPR) and Max E. Zavanelli. The SEC alleges that ZPR and Zavanelli made false and misleading advertisements in several financial magazines and in monthly newsletters to clients and prospective clients between October 2008 and May 2011.

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March 26, 2013

Morgan Keegan Directors and SEC Will Settle Charges

The eight former independent directors of the Morgan Keegan mutual funds have agreed to settle with the SEC in connection with a civil enforcement action brought by the SEC. The former directors sat on the boards of five Morgan Keegan mutual funds that incurred significant losses during the financial crisis.

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March 26, 2013

SEC Charges California-Based Hedge Fund Analyst and Two Others with Insider Trading

The SEC brought administrative charges against Matthew Teeple of San Clemente, California for insider trading. The SEC alleges that he was tipped in advance of a July 2008 announcement that Foundry Networks Inc. had agreed to be acquired by Brocade Communication Systems Inc. for approximately $3 billion.

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March 22, 2013

Brokerage CEO and Hedge Fund Manager Charged with Insider Trading

The SEC brought charges against a Houston-based hedge fund manager and his firm accused of defrauding investors in two hedge funds. The SEC further alleged that the hedge fund manager steered bloated fees to a brokerage firm CEO, who also was charged in the administrative action.

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March 22, 2013

SEC Charges Rengan Rajaratnam with Insider Trading

The SEC charged Rajarengan “Rengan” Rajaratnam for his role in the massive insider trading scheme spearheaded by his older brother Raj Rajaratnam and hedge fund advisory firm Galleon Management.

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March 18, 2013

SEC Obtains Asset Freeze Against Massachusetts-Based Investment Adviser For Stealing Money from Client

The SEC obtained an emergency order from a U.S. District Court (Massachusetts) freezing a Massachusetts-based investment adviser charged with stealing money from clients who were given the false impression they were investing in a hedge fund.

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