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Financial Services & Investments

Asset Management ADVocate

The Asset Management ADVocate provides unique analysis and insight into legal developments affecting asset managers in the United States.

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May 10, 2017

Distribution in Guise Settlement Orders Reinforce Need for Better Compliance, Contracting, and Disclosure Practices (Part 1)

In two back-to-back enforcement cases arising from the SEC's now four-year old distribution sweep exam, a Chicago-based mutual fund adviser has agreed to a $4.5 million civil money penalty and a Maryland-based firm has agreed to pay disgorgement of $17.8 million plus $3.8 million in interest and a $1 million penalty. Both cases reinforce the importance of compliance oversight, contracting, a

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May 10, 2017

Section 848 of the Financial Choice Act 2017: Unwise at any Speed (Part 2)

This series of posts examines the misguided efforts of the House Financial Services Committee to reform the existing process for issuing exemptive orders pursuant to Section 6(c) of the Investment Company Act of 1940. Section 848 of the pending Financial Choice Ac

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May 4, 2017

Section 848 of the Financial Choice Act 2017: Unwise at any Speed (Part 1)

Most observers of the Investment Company Act of 1940 ("1940 Act") would agree that, (i) without the exemptive authority in Section 6(c), Section 17(b), and in other provisions in the 1940 Act and (ii) without the manner in which the SEC and its staff have used that authority, the 1940 Act would have become obsolete insofar as it would not have been possible to adapt it to some of the most popular

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March 29, 2017

SEC Chairman Nominee Jay Clayton Provides Insight on the Future of the SEC (Part 2)

This post continues our summary of the testimony of Jay Clayton, President Trump's pick to head the SEC, at his recent nomination hearing before the Senate. Clayton commented on several important issues confronting the SEC.

FCPA

Clayton said companies doing business in countries known to have a high rate of corruption should "think long and hard" about their potential exposure not o

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March 28, 2017

SEC Chairman Nominee Jay Clayton Provides Insight on the Future of the SEC (Part 1)

For those eager to learn what direction the SEC will take during the Trump administration, some clues surfaced during the recent nomination hearing of Jay Clayton, President Trump's pick to head the SEC. Clayton commented on several important issues confronting the SEC.

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March 23, 2017

As Fintech Platforms Grow Up, Investment Management Firms Face the ‘Problems of Tomorrow’

Read our new article in The Investment Lawyer to learn more about the legal and regulatory implications of emerging technologies, including blockchain and digital ledger technology,

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March 20, 2017

Segregating Custody of Family Office Assets

Our previous post discussed how a family office registered as an investment adviser (RIA) under the Investment Advisers Act of 1940 (Advisers Act) might underestimate the scope of its custody of family assets for purposes of

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March 7, 2017

Custody Pitfalls for Family Offices

The staff of the Division of Investment Management (IM) recently issued a flurry of interpretive guidance regarding when advisers are deemed to have custody of their clients' funds and securities.

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January 18, 2017

SEC Enforces Campaign Contributions Rule

Yesterday, the SEC announced a number of political contribution-related settlements with investment advisers, both registered and exempt. As background, Rule 206(4)-5 under the Investment Advisers Act of 1940 limits the size of political contributions that certain personnel of an investment advise

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December 21, 2016

“Odd Lots” and Valuation Déjà Vu--Part 2

In the first part of this post, I explained how trading odd lot MBS can create the same valuation issue as trading PIPEs. I also touched on some important differences between MBS and PIPEs.

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December 19, 2016

“Odd Lots” and Valuation Déjà Vu--Part 1

The SEC's recent settlement (the "Order") with Pacific Investment Management Company ("PIMCO") reflects a new twist on an old issue: buying securities at bargain prices and then marking them up when calculating NAVs.

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November 29, 2016

SEC Chair’s Suggested Expansion of Executive Liability Unlikely to Occur

Apparently lost in the news of the impending departure of SEC Chair Mary Jo White is her recent suggestion to expand liability of corporate executives. In a speech on November 18, 2016, Chair White suggested a potential change in federal securities law that would hold executives accountable even if they are not involved in the misconduct and did not know about it.

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November 21, 2016

Why Tax Exempt Money Market Funds Should Make a Comeback

In a previous post, I noted that recent changes to Rule 2a-7 hit tax exempt money market funds hard, with the loss of half of their pre-reform assets. There are reasons to think these funds will recover, however.

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November 17, 2016

SEC Staff and Chair Talk Examination Priorities (For the Time Being At Least)

Speaking at a compliance workshop sponsored by the Investment Adviser Association held in Atlanta on November 10, 2016, Bill Royer, Associate Director of the SEC examination program in the Atlanta Regional Office of the SEC laid out the priorities that he expected the SEC's Office of Compliance Inspections and Examination (OCIE) to focus on in the coming year. Novel topics for OCIE in 2017, accor

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November 10, 2016

The State of the SEC’s Admissions Policy: Three Years Later

In June 2013, SEC Chair Mary Jo White announced a new SEC policy requiring admissions as part of settlements in certain types of cases. The criteria for admission cases, as stated by Chair White and an