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Your professionally curated research and reference resource fully integrating treatise and how-to guidance with underlying laws, rules, interpretations, and hundreds of sample documents.

WhaHoo!  New textbook published!

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We're pleased top announce that Karl is co-author of the first new textbook about the 40 Acts in 30 years! Investment Management Regulation: An Introduction to Principles and Practices. Available now at cap-press.com Just click on "View More" above to be taken to the publisher's site.

Adviser Regulatory & Compliance News

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The Future of Investment Mgmt monograph

March 27, 2019

From time to time we discover some good reads. A few months ago, the CFA Institute Research Foundation published a wonderful short monograph on the future of the industry. The arc and scope of the research paper by Ronald N. Kahn, managing director and global head of systematic equity research at BlackRock, is comprehensive, starting with the roots of the investment advisory industry to the current trends and projecting what things will look like in 5-10 years. It's a short, good read and paints a pretty optimistic picture despite several seemingly negative trends (e.g., passive investing, fee compression, etc.). Please click the headline to link to the document and enjoy the read!

Stradley Enforcement Summary and Discussion

March 18, 2019

Law firm Stradley Ronon issued a fine summary of SEC adviser and fund enforcement activities this week.Noting the government shutdown and SEC staff turnover, the authors explain that only 13 settled administrative actions involved Advisers Act violations during fiscal year 2018. For 2019, they predict vigorous enforcement in support of protecting retail investors. Click the headline to access the report.

Share Class Initiative Yields Fruit, Unfortunately

March 16, 2019

As we reported earlier this year,in February the SEC announced its Share Class Selective Disclosure Initiative offering a certain form of clemency for self-reporting advisers. In recent years, the SEC has investigated via sweep and targeted exams numerous advisers for their mutual fund share sales practices, finding a variety of fraudulent and inappropriate practices. In mid-March, the SEC staff announced that 79 advisers had self-reported and paid $125 million is restitution to investors. Click the headline for the full SEC press release and report.

Adviser Found to Have Conducted a Faulty Auction Process

March 15, 2019

The SEC brought an enforcement action against a registered investment adviser, Talimco, LLC (Talimco), in connection with the sale of a mortgage loan participation by one of its clients, a collateralized debt obligation, to another one of its clients, a commercial real estate investment fund (Fund). The SEC stated that Talimco, which owed a fiduciary duty to both the seller and buyer, breached its duty to the seller in violation of Section 206(2) of the Advisers Act by failing to seek out willing bidders for the asset. As part of the sale process, Rogers, Talimco’s chief operating officer, convinced two unwilling parties to agree to bid on the asset by assuring each of them that it would not win the auction. As a result of these actions, the SEC found that the collateralized debt obligation was deprived of the opportunity to obtain multiple bona fide bids for the asset. The Fund, which won the auction, later sold the asset at a profit, resulting in Talimco receiving management and performance fees.

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