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Adviser Regulatory & Compliance News

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Vigilance is vital sayeth the SEC folks

March 24, 2020

A reminder that even under the current hard times, compliance and regulatory vigilance is vital came from the SEC on March 23. In a public statement from the SEC's Co-Directors of Enforcement, the staff emphasized "the importance of maintaining market integrity and following corporate controls and procedures." They illustrated their point with a discussion of insider trading, noting that, "...broker-dealers, investment advisers, and other registrants must comply with policies and procedures that are designed to prevent the misuse of material nonpublic information." Please use the link in the headline to this blurb to access the Public Statement.

SEC Provides Relief to Investment Advisers in Reaction to Coronavirus

March 13, 2020

The SEC responded to the outbreak of coronavirus disease 2019 (COVID-19) with respect to investment advisers by issuing an order (Order) that states for the time period specified below that: (1) a registered investment adviser is exempt from the requirements: (a) under Rule 204-1 of the Advisers Act to file an amendment to Form ADV; and (b) under Rule 204-3(b)(2) and (b)(4) related to the delivery of Form ADV Part 2 (or a summary of material changes) to existing clients, where the conditions below are satisfied; (2) an exempt reporting adviser is exempt from the requirements under Rule 204-4 under the Advisers Act to file reports on Form ADV, where the conditions below are satisfied; and (3) a registered investment adviser that is required by Section 204(b) of and Rule 204(b)-1 under the Advisers Act to file Form PF is exempt from those requirements, where the conditions set forth in the Order are satisfied.

Massachusetts Securities Division Expands Jurisdiction to Non-Securities Activities

March 2, 2020

In a somewhat unusual move, the Mass. Securities Division recently asserted its jurisdiction over an individual, who was not registered as a broker or investment adviser, and who's business sought to have investors sell their securities to buy insurance products. This move by the Mass. regulator is consistent with the state's increasingly assertive actions regarding a state fiduciary standard. The law firm Mintz Levin in Boston published an fine memo detailing the case, which can be accessed by clicking the heading to this blurb.

Adviser Charged with Improperly Registering as an SEC Adviser

February 27, 2020

The SEC brought an enforcement action against William M. Malloy, III and two investment adviser firms under his control, MWM 1835, LLC and Fortress Investment Management, LLC for, among other things improperly registering with the SEC as investment advisers when such entities were not eligible to register as such.