BROWSE BY TOPIC
- Bad Brokers
- Compliance Concepts
- Investor Protection
- Investments - Unsuitable
- Investments - Strategies
- Wall Street News
- Investments - Private
- Rules & Regulations
- Bad Advisors
- Boiler Rooms
- Terminations/Cost Cutting
- General News
- Donald Trump & Co.
- Regulatory Sanctions
- Big Banks
Stories of Interest
- Sarah ten Siethoff is New Associate Director of SEC Investment Management Rulemaking Office
- Catherine Keating Appointed CEO of BNY Mellon Wealth Management
- Credit Suisse to Pay $47Mn to Resolve DOJ Asia Probe
- SEC Chair Clayton Goes 'Hat in Hand' Before Congress on 2019 Budget Request
- SEC's Opening Remarks to the Elder Justice Coordinating Council
- Massachusetts Jury Convicts CA Attorney of Securities Fraud
- Deutsche Bank Says 3 Senior Investment Bankers to Leave Firm
- World’s Biggest Hedge Fund Reportedly ‘Bearish On Financial Assets’
- SEC Fines Constant Contact, Popular Email Marketer, for Overstating Subscriber Numbers
- SocGen Agrees to Pay $1.3 Billion to End Libya, Libor Probes
- Cryptocurrency Exchange Bitfinex Briefly Halts Trading After Cyber Attack
- SEC Names Valerie Szczepanik Senior Advisor for Digital Assets and Innovation
- SEC Modernizes Delivery of Fund Reports, Seeks Public Feedback on Improving Fund Disclosure
- NYSE Says SEC Plan to Limit Exchange Rebates Would Hurt Investors
- Deutsche Bank faces another challenge with Fed stress test
- Former JPMorgan Broker Files racial discrimination suit against company
- $3.3Mn Winning Bid for Lunch with Warren Buffett
- Julie Erhardt is SEC's New Acting Chief Risk Officer
- Chyhe Becker is SEC's New Acting Chief Economist, Acting Director of Economic and Risk Analysis Division
- Getting a Handle on Virtual Currencies - FINRA
We seek to provide information, insights and direction that may enable the Financial Community to effectively and efficiently operate in a regulatory risk-free environment by curating content from all over the web.
Stay Informed with the latest fanancialish news.
NEWSLETTERS & ALERTS
OCIE Issues Risk Alert on RIA Advertising
The SEC's Office of Compliance Inspections and Examinations (“OCIE”) provided a list of compliance issues relating to Rule 206(4)-1 (the “Advertising Rule”) under the Investment Advisers Act of 1940 (the “Advisers Act”). The cited compliance issues were most frequently identified in deficiency letters recently sent to RIAs and as part of an examination initiative that focused on advisers’ use of accolades in their marketing materials (“Touting Initiative”).
Here are the most frequent deficiencies that OCIE staff has identified in connection with failure to comply with the Advertising Rule:
► Misleading Performance Results. OCIE staff observed advertisements that: (i) presented performance results without deducting advisory fees; (ii) compared results to a benchmark but did not include disclosures about the limitations inherent in such comparisons, including instances where, for example, an advertisement did not disclose that the advertised strategy materially differed from the composition of the benchmark to which it was compared; (iii) contained hypothetical and backtested performance results, but did not explain how these returns were derived and did not include other potentially material information regarding the performance results.
► Misleading One-on-One Presentations. OCIE staff observed advertisements that: (i) contained performance results (gross of fees) in certain one-on-one presentations, but did not include potentially relevant disclosures; (ii) did not disclose that the advertised performance results did not reflect the deduction of advisory fees and that client returns would be reduced by such fees and other expenses.
► Misleading Claim of Compliance with Voluntary Performance Standards. OCIE staff observed advisers that claimed their advertised performance results complied with a certain voluntary performance standard, when it was not clear to staff that the performance results in fact adhered to the performance standard’s guidelines.
► Cherry-Picked Profitable Stock Selections. OCIE staff observed advisers that included only profitable stock selections or recommendations in presentations, client newsletters, or on their websites, without meeting the conditions set forth in Subsection (a)(2) of the Advertising Rule
► Misleading Selection of Recommendations. OCIE staff observed advisers that: (i) disclosed past specific investment recommendations that may have been misleading because they included only certain, and not all, recommendations, in order to illustrate a particular investment strategy, and they did not meet the conditions set forth in Subsection (a)(2) of the Advertising Rule; and, (ii) did not satisfy the representations upon which IM staff based certain no-action assurances as provided in the TCW Group and Franklin no-action letters
► Compliance Policies and Procedures. OCIE staff observed advisers that did not have, or did not implement policies and procedures pertaining to these issues: (i) the process for reviewing and approving advertising materials prior to their publication or dissemination; (ii) when using composites, determining the parameters for which accounts were included or excluded from performance calculations; and, (iii) confirming the accuracy of performance results in compliance with the Advertising Rule.