The SEC continues to revisit firms with prior deficiencies and is increasingly relying on its data analytics technology to determine its examination schedule. Founder and President Amy Lynch explains that the regulator has been returning to firms that had previous violations, conducting followup exams to ensure those firms have made the proper corrective measures. One area of focus has been firms employing individuals with disciplinary histories without issuing the required disclosures. See Fund Intelligence (subscription…
On September 4, 2019, the Office of Compliance Inspections and Examinations (“OCIE”) released a Risk Alert (the “Alert”) on the results of examinations of investment advisers where issues regarding principal and agency cross transactions were discovered. The Alert described common deficiencies found generally, and at private fund firms, specifically. The findings discussed come from examinations of registered investment advisers over the past three years.
Common principal transaction deficiencies found included:
Entering into principal transactions while…
Recent SEC cases naming two prominent firms for violations related to their revenue sharing agreements could be a trend that continues through next year. FrontLine’s Founder and President Amy Lynch states that the recent cases are likely the first in a string that would likely include large, independent advisers, and not just distributors. Ms. Lynch further notes that the SEC is focused on the use of proper disclosures and wants firms to inform clients about…
