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Adviser Regulatory & Compliance News

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Comparison Chart of Fiduciary Standards

January 11, 2021

If you've paid attention, you know that there is a maddening patchwork quilt of fiduciary and related standards developing nationally. Our friends at Eversheds Sutherland compiled a fantastic quick reference chart of the current federal and state fiduciary and best interest regulations. Click the headline to this blurb to access the chart.

SEC Revamps Investment Adviser Advertisement Rules

December 22, 2020

The SEC adopted amendments to rules that govern investment adviser advertisements and payments to solicitors. The new rules create a single rule that replaces the current advertising and cash solicitation rules. The amended rules: • Re-defines “advertisement”; • Adds and/or modifies certain general prohibitions; • Modifies the regulation of testimonials, endorsements and third-party ratings; • Modifies the regulation of the presentation of adviser performance; • Amends and modifies certain advertising books and records rule; and • Amends and modifies Form ADV. These amendments will be effective 60 days after publication in the Federal Register and such publication likely will occur in January, 2021.

SEC Finds Adviser to Have Faulty Compliance Procedures Addressing Loans and Financial Condition

December 14, 2020

The SEC brought an enforcement action against Robert Lindner, the President, Chief Executive Officer, Chairman and majority shareholder of Lindner Capital Advisers, Inc. (LCA), an SEC registered investment adviser. The SEC found that during 2018 and 2019, LCA and Lindner made materially false statements in a report filed with the SEC and given to its clients, and failed to implement compliance procedures reasonably designed to prevent violations of the Advisers Act. the SEC found that LCA and Lindner disclosed that LCA had no financial condition that is reasonably likely to impair its ability to meet contractual obligations to clients. The SEC stated that this statement was false because, at the time and throughout the remainder of 2019, LCA was heavily leveraged and increasingly unable to meet its basic operating expenses.

Pricing Services Fails to Implement Adequate Compliance Procedures

December 9, 2020

The SEC brought an enforcement action against ICE Data Pricing & Reference Data, LLC, a registered investment adviser, provides global securities pricing, evaluations, and other information to its advisory clients through various subscription options. The SEC stated that the valuation of fixed-income securities can affect both retail and institutional investors. It noted that independent valuations play a critical role in complex fixed-income investments because these securities are largely traded in over-the-counter markets. It added that inaccurate valuations can affect investment decisions, advisory fees, the accuracy of financial statements and investor account statements, and reported investment returns and portfolio performance.

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