Doug Cornelius on compliance for private equity real estate
I’ve complained about the Securities and Exchange Commission focusing on the use of the word “may” in disclosures. I’ve typically expected “may” to offer some optionality for the adviser. The SEC has found it inadequate in several instances. We can agree to disagree. I just came across a case in which I agree that the … Read more »
SoFi Wealth, the robo-adviser ran into trouble when it substituted third-party ETFs with SoFi-sponsored ETFs in its platform. According to the SEC order, SoFi Wealth failed to provide its clients with full and fair disclosure of its conflicts of interest relating to the transactions, including that it: SoFi had a preference for placing clients into SoFi’s … Read more »
SPACs are the current tulips of the markets. Everyone wants a piece of one. Celebrities are joining the rush. As noted in the title, Shaq has one. Actually Shaq is on his second SPAC. Almost 250 SPAC IPOs were completed in 2020, raising total gross proceeds of approximately $75 billion That was about half of … Read more »
The Secretary of the Commonwealth filed its first enforcement action under the Massachusetts Fiduciary Rule. Robinhood and its gamification of investing are in its bullseye. The Massachusetts Securities Division adopted amendments to 950 Mass. Code Regs. 12.200 earlier this year as they relate to the standard of conduct applicable to broker-dealers and agents. The amendments apply a fiduciary … Read more »
The SEC’s Office of Compliance Inspections and Examination launched a lot info last week. It livestreamed a National Investment Adviser/Investment Company Compliance Outreach and published a Risk Alert on notable compliance issues identified by OCIE related to Rule 206(4)-7. Peter Driscoll, Director of OCIE, started off the program highlighting three words that should be applicable … Read more »
The Securities and Exchange Commission announced a new initiative focused on complex products: The Exchange-Traded Products Initiative. It’s led by the Division of Enforcement’s Complex Financial Instruments Unit. It was developed by Armita Cohen and data analytics specialists Daniel Koster and Jonathan Vogan and has been coordinated by Ms. Cohen. The first inkling of this initiative … Read more »
The SEC’s Office of Compliance Inspections and Examinations ran a sweep it called the Multi-Branch Initiative. It published a risk alert on November 9 with its findings. The Risk Alert is mostly a collection of typical compliance problems: Custody of client assets Fees and expenses Oversight and supervision of supervised persons Advertising Code of ethics … Read more »
With the passing of Eddie Van Halen, I thought it appropriate to re-publish this great story about Van Halen and Compliance that I first wrote in 2009. [Spoiler alert] Those brown M&M’s served a real purpose. You may have heard the story about Van Halen’s banning of brown M&M’s from its dressing room. I chalked … Read more »
The Office of Compliance Inspections and Examinations released a new risk alert last week on COVID-19 compliance risks for broker-dealers and investment advisers. OCIE broke the concerns into six categories: protection of investors’ assets; supervision of personnel; practices relating to fees, expenses, and financial transactions; investment fraud; business continuity; and the protection of investor and … Read more »
Read some great research by Regulatory Compliance Watch. Bill Myers wrote a story summarizing the Form ADV data for over 4500 private fund advisers. Of that, at least 2800 had more than one job at the firm. Only 622 listed the title for their CCO as only compliance officer. The most common other hat was … Read more »