Archive Of The Category ‘SEC Risk Alert‘

OCIE Observations: Compliance Programs

OCIE Observations: Compliance Programs

04 January 2021

The SEC Risk Alerts keep coming, this time with exam observations regarding investment advisors’ Compliance Programs. According to OCIE, the most common exam deficiencies arise from issues with Rule 206-4(7), known as “the Compliance Rule.” Rule 206(4)-7 requires investment advisors to have policies and procedures reasonably designed to prevent, detect, and correct violations of theRead More »

OCIE: Exam Observations

OCIE: Exam Observations

04 December 2020

The SEC has blessed us once again with another Risk Alert.  This time, they are providing us with a summary of their findings from a series of focused exams of advisors with branch offices. We intentionally left out the term “branch office” in the title of this article, because many of their findings are relevantRead More »

SEC Risk Alert: Safeguarding Against Credential Compromise

SEC Risk Alert: Safeguarding Against Credential Compromise

30 October 2020

On September 15th, the SEC issued a Risk Alert to address a method of cyber-attack that is more sophisticated yet increasingly accessible to attackers: “credential stuffing.” We’re getting close to Thanksgiving, but that’s not the direction the SEC is going. This method of cyber-attack involves using compromised client login credentials to gain unauthorized access toRead More »

COVID-19 Compliance Risks and Considerations for Investment Advisers

COVID-19 Compliance Risks and Considerations for Investment Advisers

01 September 2020

On August 12th the SEC issued a Risk Alert outlining observations from exams and risks in light of the COVID-19 work from home environment. The Commission outlined six (6) areas of concern for firms to review and adjust policies and procedures as necessary, focusing on operational, technological, commercial and other challenges identified. Below we highlightRead More »

SEC’s Ransomware Alert

SEC’s Ransomware Alert

04 August 2020

On July 10th the SEC issued a risk alert focusing on ransomware and the importance of generating awareness within advisory firms of current threats.  The SEC is encouraging registrants to monitor alerts provided by the Department of Homeland Security Cybersecurity and Infrastructure Security Agency (CISA) and share the information gathered with third party service providersRead More »

Risk Alert: Employee Supervision and Employing Personnel with Disciplinary Events

Risk Alert: Employee Supervision and Employing Personnel with Disciplinary Events

28 August 2019

As part of the SEC’s focus on protecting retail investors, in 2017, they examined over 50 RIAs to assess the supervisory practices of advisers who (at the time) currently or previously employed personnel with a history of disciplinary events (the “Supervision Initiative”).  Nearly all of the advisers examined received deficiency letters. The Risk Alert recentlyRead More »

Risk Alert: Common Reg S-P Deficiencies

Risk Alert: Common Reg S-P Deficiencies

22 July 2019

  Once again, the SEC has provided insight into exam deficiencies.  This time, it’s regarding Reg S-P. Reg S-P requires, among other things, that registered investment advisers: provide customers with a copy of the Firm’s Privacy Notice initially and annually, if there are changes; provide customers with an option to opt out of personal informationRead More »

Risk Alert: Use of Third Parties for Network Storage

Risk Alert: Use of Third Parties for Network Storage

02 July 2019

As a reminder, a “Risk Alert” is the SEC’s way of giving you a heads up about patterns of deficiencies during recent examinations.  They can help you stay on top of your game. On May 23, 2019, the SEC issued a risk alert on utilizing third parties to host and store records.  Using a thirdRead More »

Overcoming the Challenges of SEC Compliance around Electronic Messaging

Overcoming the Challenges of SEC Compliance around Electronic Messaging

01 March 2019

  Did you see the SEC’s Risk Alert on Electronic Messaging? We did!  And let us start by saying, this Risk Alert was actually really helpful! A lot of times, the SEC issues Risk Alerts that tell you the issues they’re seeing in recent SEC examinations and remind you of your compliance obligations, but theyRead More »

Attention Advisers & Sub-Advisers to Mutual Funds and ETFs

Attention Advisers & Sub-Advisers to Mutual Funds and ETFs

04 February 2019

Advisers to the securities listed below are on the SEC’s radar for examination.  Do you manage: an index fund that tracks custom-built indexes? a smaller ETF? an ETF with little secondary market trading volume? a fund with higher allocations to certain securitized assets? a fund that underperforms significantly relative to peer groups? a newer mutualRead More »

Advice on the SEC’s Cash Solicitation Rule Risk Alert

Advice on the SEC’s Cash Solicitation Rule Risk Alert

20 November 2018

On October 31st, the SEC specifically addressed the Cash Solicitation Rule in its risk alert titled, “Halloween Risk Alert.”  Well, now we know the SEC has a sense of humor… or is trying to.  But in all seriousness, when OCIE issues a risk alert, you should take note. Why…?  Because OCIE’s risk alerts are issued asRead More »

How to Navigate the SEC’s Best Execution Risk Alert

How to Navigate the SEC’s Best Execution Risk Alert

02 August 2018

“Best execution,” is a subjective target that is difficult to measure, rank, or define.  In general, best execution is the effort of an adviser, to seek best price while also factoring in: expertise, sophistication, speed, and “the full range and quality of a broker-dealer’s services including, among other things, the value of research provided asRead More »

Advertising Risk Alert

Advertising Risk Alert

01 October 2017

An adviser’s use of marketing materials continues to be an area of high concern for the SEC, and with good reason. Marketing materials are how you showcase your firm to the world. They’re used to obtain investors, to grow the business, and find new opportunities. And you better believe the SEC is going to reviewRead More »