SEC administrative law judge bars investment manager for misrepresenting GIPS compliance

2014 ◽  
Vol 15 (3) ◽  
pp. 38-40
Author(s):  
Michael S. Caccese ◽  
Douglas Y. Charton ◽  
Pamela A. Grossetti
Keyword(s):  
Financial Services ◽  
Design Methodology ◽  
Performance Standards ◽  
Administrative Law ◽  
Investment Performance ◽  
Content Type ◽  
Policies And Procedures ◽  
Investment Manager ◽  
Practical Guidance ◽  
Practical Implications

Purpose – To explain an administrative law judge (ALJ) decision, along with a censure, fine, and industry disbarment, against an investment adviser for misleading advertising and false claims of compliance with Global Investment Performance Standards (GIPS). Design/methodology/approach – Explains the background to GIPS, the investment adviser’s GIPS violations, the significance of the case, and lessons to be learned by investment advisors on compliance with GIPS standards. Findings – The decision is particularly significant because the ALJ issued such severe sanctions based solely on false claims of GIPS compliance notwithstanding the fact that all reported performance returns were accurate and no investors relied on or were harmed by the false claims of compliance. Practical implications – The Zavanelli case should serve to put firms on notice that persistent noncompliance with the GIPS standards can have serious consequences and that all marketing materials should be subject to effective review and approval policies and procedures prior to distribution or publication to ensure compliance with the GIPS standards. Originality/value – Practical guidance from experienced financial services lawyers.

MSRB publishes its first compliance advisory for broker-dealers

2016 ◽  
Vol 17 (3) ◽  
pp. 49-51
Author(s):  
Scott R. Anderson ◽  
Kate S. Poorbaugh
Keyword(s):  
Financial Services ◽  
Design Methodology ◽  
Content Type ◽  
Compliance Programs ◽  
Policies And Procedures ◽  
Practical Guidance ◽  
Effective Compliance ◽  
Practical Implications

Purpose To summarize the Municipal Securities Rulemaking Board’s 2016 Compliance Advisory for brokers, dealers and municipal securities dealers. Design/methodology/approach Summarizes several Municipal Securities Rulemaking Board (MSRB) rules that the Compliance Advisory highlights as presenting key compliance risks for brokers, dealers and municipal securities dealers. Discusses the factors included in the Compliance Advisory that dealers should consider when evaluating compliance procedures and controls. Findings By highlighting some key compliance risks and providing considerations tailored to those risks, the Compliance Advisory can be used as a tool to aid dealers in developing and assessing effective compliance programs. Practical implications Dealers should consider reviewing their firms’ existing compliance policies and procedures in light of the considerations discussed in the Compliance Advisory. Originality/value Practical guidance from experienced securities and financial services regulatory lawyers.

MSRB publishes 2017 compliance advisory for broker-dealers

2018 ◽  
Vol 19 (1) ◽  
pp. 50-52
Author(s):  
Scott R. Anderson ◽  
James Audette ◽  
Kate S. Poorbaugh
Keyword(s):  
Financial Services ◽  
Design Methodology ◽  
Content Type ◽  
Compliance Programs ◽  
Policies And Procedures ◽  
Practical Guidance ◽  
Effective Compliance ◽  
Practical Implications

Purpose To summarize the Municipal Securities Rulemaking Board’s 2017 Compliance Advisory for brokers, dealers and municipal securities dealers. Design/methodology/approach Summarizes several Municipal Securities Rulemaking Board (MSRB) rules that the Compliance Advisory highlights as presenting key compliance risks for brokers, dealers and municipal securities dealers. Discusses the factors included in the Compliance Advisory that dealers should consider when evaluating compliance procedures and controls. Findings By highlighting some key compliance risks and providing considerations tailored to those risks, the Compliance Advisory can be used as a tool to aid dealers in developing and assessing effective compliance programs. Practical implications Dealers should consider reviewing their firm’s existing compliance policies and procedures in light of the considerations discussed in the Compliance Advisory. Originality/value Practical guidance from experienced securities and financial services regulatory lawyers.

ESMA issues Brexit opinions to EU regulators: a warning shot not only to the UK but also to the EU27

2017 ◽  
Vol 18 (4) ◽  
pp. 50-52
Author(s):  
William Yonge ◽  
Simon Currie
Keyword(s):  
Financial Services ◽  
Design Methodology ◽  
Content Type ◽  
Regulatory Response ◽  
Market Participants ◽  
Financial Firms ◽  
Practical Guidance ◽  
The Uk ◽  
Practical Implications ◽  
The Eu

Purpose To summarize and analyse four opinions issued in May and July 2017 by the European Securities and Markets Authority (“ESMA”) concerning regulatory and supervisory arbitrage risks that arise as a result of increased requests from financial market participants to relocate activities and functions in the EU27 following the UK’s decision to withdraw from the EU, and the expected regulatory response to those risks. Design/methodology/approach Discusses the possible relocation of financial firms, activities and functions following the UK’s decision to withdraw from EU; the resulting cross-sectoral regulatory and supervisory arbitrage risks that ESMA foresees; nine principles that ESMA enumerates to guide its regulatory response to those risks; some common themes that emerge from ESMA’s July Opinions; and the implications for UK firms and trading venues seeking to establish a presence in the EU 27. Findings ESMA foresees regulatory and arbitrage risks in Brexit and a potential “race to the bottom” as certain national regulators jostle for and grab UK market share. Practical implications UK firms and trading venues seeking to establish a presence in the EU27 from which to operate will need to give detailed consideration and focus to the resources and operational substance which will need to be located in the jurisdiction in which that presence is established. Originality/value Practical guidance from experienced financial services, securities and fund management lawyers.

What is new after Liu: unsettled questions surrounding SEC disgorgement

2020 ◽  
Vol 21 (2/3) ◽  
pp. 127-135
Author(s):  
M. Alexander Koch ◽  
Carmen J. Lawrence ◽  
Aaron Lipson ◽  
Russ Ryan ◽  
Richard H. Walker ◽  
...  
Keyword(s):  
Financial Services ◽  
Design Methodology ◽  
Federal District ◽  
District Court ◽  
Content Type ◽  
Equitable Relief ◽  
Practical Guidance ◽  
Court Proceedings ◽  
The Impact ◽  
Practical Implications

Purpose To analyze the impact of the U.S. Supreme Court’s decision in Liu v. SEC, where the Court confronted the issue of whether the SEC can obtain disgorgement in federal district court proceedings. Design/methodology/approach This paper provides an overview of the authors’ prior work analyzing courts’ treatment of SEC disgorgement and a summary of the background and opinion in Liu v. SEC. This article then focuses on the practical implications of Liu on SEC disgorgement by considering questions left open by the decision. Findings The Court in Liu held that the SEC is authorized to seek disgorgement as “equitable relief” as long as it “does not exceed a wrongdoer’s net profits and is awarded for victims.” But the Court left many unanswered questions, such as whether disgorged funds must always be returned to investors for disgorgement to be a permissible equitable remedy, whether the SEC can obtain joint-and-several disgorgement liability from unrelated co-defendants, what “legitimate expenses” should be deducted in disgorgement calculations, and to what extent the SEC can seek disgorgement in cases when victims are difficult to identify. Originality/value Original, practical guidance from experienced lawyers in financial services regulatory and enforcement practices, many of whom have previously worked in the SEC’s Division of Enforcement.

Blockchain for business

2019 ◽  
Vol 20 (1) ◽  
pp. 17-21 ◽  
Author(s):  
Rohith P. George ◽  
Brad L. Peterson ◽  
Oliver Yaros ◽  
David L. Beam ◽  
Julian M. Dibbell ◽  
...  
Keyword(s):  
Financial Services ◽  
Design Methodology ◽  
Legal Issues ◽  
Use Cases ◽  
Proof Of Concept ◽  
Content Type ◽  
Wide Range ◽  
Practical Guidance ◽  
The Right ◽  
Practical Implications

Purpose To introduce blockchain in simple terms for business lawyers to be able to spot the right issues and ask the right questions. Design/methodology/approach This article provides an overview of blockchain, identifies two example use cases, and highlights some of the most pressing legal issues, including issues to address in on-chain programming, off-chain agreements and other issues when determining whether to implement a blockchain solution. Findings This article concludes that there has been a significant growth in investment and interest in blockchain. Numerous companies across different sectors have developed blockchain proof-of-concepts, with some heading towards production deployments. At this point, commercial blockchain is largely in the pilot or proof-of-concept stage across a wide range of use cases, with payments and supply chain being two of the most promising use cases. This article also identifies possible legal issues associated with blockchain. Practical implications Despite the growing interest in blockchain, it is still a novel topic to many business lawyers. It is very important that lawyers are able to identify the right issues and ask the right questions. Originality/value Practical guidance from experienced lawyers in the Technology Transactions and Financial Services Regulatory & Enforcement practices.

Financial institutions and the new class action under Italian law: a compliance approach

2019 ◽  
Vol 20 (4) ◽  
pp. 9-14
Author(s):  
Francesco Falco
Keyword(s):  
Financial Institutions ◽  
Design Methodology ◽  
Case Law ◽  
Class Action ◽  
Content Type ◽  
New Class ◽  
Italian Law ◽  
Policies And Procedures ◽  
Practical Guidance ◽  
Practical Implications

Purpose To explain the impacts of the class action, as recently amended by the Italian Parliament, and help financial institutions to develop a compliance approach in order to avoid and/or mitigate the relevant risks. Design/methodology/approach This article provides an overview on the Italian class action, as recently amended by the Italian Law No. 31/2019, examines the relevant impact for financial institutions (taking into account some recent case law) and identifies possible compliance solutions to avoid/mitigate the relevant risks. Findings The recent amendments to the Italian class action may increase risks for financial institutions. Practical implications (Optional) Financial institutions should examine their relationships with stakeholders in the light of the new Italian class action in order to implement policies and procedures to prevent the relevant risks. Originality/value Practical guidance from an experienced lawyer in the litigation and compliance fields.

OCIE to investment advisers: focus on these five problem areas

2017 ◽  
Vol 18 (2) ◽  
pp. 16-18
Author(s):  
Brynn D. Peltz ◽  
Ilan S. Nissan ◽  
Evyn W. Rabinowitz
Keyword(s):  
Design Methodology ◽  
Code Of Ethics ◽  
Securities And Exchange Commission ◽  
Content Type ◽  
Policies And Procedures ◽  
Funds Management ◽  
Practical Guidance ◽  
Investment Advisers ◽  
Practical Implications

Purpose To explain a Risk Alert published on February 7, 2017 published by the Securities and Exchange Commission (SEC) Office of Compliance Inspections and Examinations (OCIE) describing the five compliance topics most frequently identified in deficiency letters sent to investment advisers after the completion of an OCIE examination. Design/methodology/approach Discusses deficiencies noted by the OCIE relating to the Compliance Rule, required regulatory filings, the Custody Rule, the Code of Ethics Rule, and the Books and Records Rule. Findings The OCIE published the Risk Alert with its noted deficiencies only one month after releasing its exam priorities for the year. Practical implications All investment advisers should consider reviewing their compliance practices, policies and procedures in light of the deficiencies and weaknesses identified in the SEC Risk Alert. Originality/value Practical guidance from experienced lawyers specializing in asset and funds management.

MiFID II: practical implications for high yield bond investors

2018 ◽  
Vol 19 (1) ◽  
pp. 58-62
Author(s):  
Natalia Sokolova ◽  
Tamer Bahgat
Keyword(s):  
Financial Markets ◽  
Financial Services ◽  
Design Methodology ◽  
Bond Market ◽  
High Yield ◽  
Content Type ◽  
Minimal Impact ◽  
Adoption And Implementation ◽  
Practical Guidance ◽  
Practical Implications

Purpose The purpose of this paper is to alert the European high-yield market to several regulatory developments relating to the adoption of markets in financial instruments directive (MiFID) II. Design/methodology/approach Reviews regulatory developments in connection with the MiFID II adoption and implementation, identifies several practical implications for the high-yield market professionals and suggests certain modifications in the banks’ internal protocols and practices that may be required as a result. Findings When the provisions of MiFID II are applied on January 3, 2018, they may have a dramatic impact on global financial markets, including a number of practical implications for the high-yield bond market. The burden of implementing MiFID II will be primarily on banks and brokers with minimal impact on the high-yield issuers. Originality/value Practical guidance from experienced high yield, securities and financial services lawyers.

SEC issues Staff Legal Bulletin after four-year comprehensive review of proxy system

2015 ◽  
Vol 16 (1) ◽  
pp. 63-65
Author(s):  
John E. Sorkin ◽  
Abigail Pickering Bomba ◽  
Steven Epstein ◽  
Jessica Forbes ◽  
Peter S. Golden ◽  
...  
Keyword(s):  
Design Methodology ◽  
Securities And Exchange Commission ◽  
Third Parties ◽  
Comprehensive Review ◽  
Content Type ◽  
Policies And Procedures ◽  
Practical Guidance ◽  
Investment Advisers ◽  
Practical Implications

Purpose – To provide an overview of the guidance for proxy firms and investment advisers included in the Staff Legal Bulletin released this year by the Securities and Exchange Commission (SEC) after its four-year comprehensive review of the proxy system. Design/methodology/approach – Discusses briefly the context in which the SEC’s review was conducted; the general themes of the guidance provided; the most notable aspects of the guidance; and the matters that were expected to be, but were not, addressed by the SEC. Findings – The guidance does not go as far in regulating proxy advisory firms as many had anticipated it would. The key obligations specified in the guidance are imposed on the investment advisers who engage the proxy firms. The responsibilities, policies and procedures mandated do not change the fundamental paradigm that has supported the influence of proxy firms – that is, investment advisers continue to be permitted to fulfill their duty to vote client shares in a “conflict-free manner” by voting based on the recommendations of independent third parties, and continue to be exempted from the rules that generally apply to persons who solicit votes or make proxy recommendations. Practical implications – The SEC staff states in the Bulletin that it expects that proxy firms and investment advisers will conform to the obligations imposed in the Bulletin “promptly, but in any event in advance of [the 2015] proxy season.” Originality/value – Practical guidance from experienced M&A lawyers.

The SEC’s Municipal Advisor Rule will prompt new practices for market participants

2014 ◽  
Vol 15 (2) ◽  
pp. 10-17
Author(s):  
David Bannard ◽  
Reed Groethe
Keyword(s):  
Financial Services ◽  
Design Methodology ◽  
Securities Market ◽  
Information Flows ◽  
Content Type ◽  
Market Participants ◽  
Financial Products ◽  
Practical Guidance ◽  
Flow Of Information ◽  
Practical Implications

Purpose – To explain the new Municipal Advisor Rule that will take effect on July 1, 2014, which regulates persons and firms that provide advice to municipal issuers and obligated parties regarding municipal financial products or the issuance of municipal securities or that engage in certain solicitation of municipalities or obligors on behalf of third parties. Design/methodology/approach – Explains who is treated as a Municipal Advisor, the standards applicable to Municipal Advisors, how the Rule may affect municipal securities issuers and obligated persons (collectively referred to as “Borrowers”) as well as other market participants, describes the exceptions and exemption s to the requirements of the Rule, and concludes with suggestions as to how Borrowers and other market participants may promote the flow of information. Findings – The Rule will carry out a requirement of the Dodd-Frank Act, which provides that any party that provides advice to a Borrower regarding municipal financial products or the issuance of municipal securities must register with the SEC and the MSRB as a Municipal Advisor, unless such party qualifies for an exception or exemption under the Rule. Practical Implications: The Rule will change how information flows in the municipal securities market. Some consequences of the Rule may disadvantage Borrowers and other market participants. The Rule may restrict the flow of information provided to Borrowers by participants in the municipal securities marketplace that are not Municipal Advisors. Originality/value – Practical guidance from experienced financial services lawyers.

Sign in / Sign up

Export Citation Format

Share Document