RIA Compliance Blog
The Securities and Exchange Commission (“SEC”) issued a settled administrative order against TAG Associates LLC (“TAG”), a Delaware limited liability company registered with the SEC as an investment adviser since January 2002. Among other violations identified in the proceeding, the SEC found that TAG failed to comply with Regulation S-ID by inadequately administering and maintaining its written Identity Theft Prevention Program (“Program”), as required under 17 C.F.R. § 248.201. While the proceeding also involved a separate finding relating to the Custody Rule under the Investment Advisers Act, the order highlighted the violation of Regulation S-ID and the importance of ongoing compliance reviews and management oversight in ensuring that Programs are properly administered and maintained.
Investment Adviser and its Owner Consent to SEC judgment for Fraudulent Misrepresentation
We previously posted about the Securities and Exchange Commission’s (SEC) enforcement action against Parker Terrill Austin (“Austin”) and Embarcadero Capital Advisors, Inc. (“Embarcadero”) for alleged misuse of client’s nonpublic personal information. In that case, each party consented to the entry of a separate judgment [against Austin and Embarcadero] last month. Those judgments also resolved allegations regarding misrepresentations by the same defendants.
In the complaint, in addition to the privacy claims, the SEC also alleged that Austin and Embarcadero made fraudulent misrepresentations in relation to the disclosure documents filed with the commission and given to clients. These allegations resulted in findings of violations of the antifraud provisions of Sections 206(1), 206(2), and 207 of the Investment Advisers Act of 1940.
Investment Adviser Agrees to Settle with SEC Over Misuse of Client Information
Highlighting the importance of properly handling clients’ personal information and complying with applicable fiduciary obligations, the Securities and Exchange Commission (SEC) reached a settlement last month that resulted in a final judgment brought against Parker Terrill Austin (“Austin”), an investment adviser based in California and founder of his advisory firm, Embarcadero Capital Advisors, Inc. (“Embarcadero”). The SEC filed its complaint in the U.S. District Court for the Central District of California on September 10, 2025.
SEC Risk Alert Highlights Key Deficiencies in Annual Review
The SEC Division of Examinations recently issued a Risk Alert detailing examination observations regarding SEC-registered investment advisers’ (“advisers”) compliance with the annual review requirements under Rule 206(4)-7 of the Investment Advisers Act of 1940 (“Compliance Rule”). The Risk Alert serves as a reminder that an annual compliance review is more than a check-the-box exercise. Advisers should conduct a meaningful review of their compliance program, document the results, and address any deficiencies identified.
SEC Highlights Effective Compliance Controls for RIAs
The Securities and Exchange Commission (“SEC”) settled an administrative proceeding against Simplify Asset Management, Inc. (“Simplify”), a Delaware corporation and registered investment adviser that engages in transactions related to exchange-traded funds (“ETFs”), for multiple violations of the Investment Company Act of 1940 (the “Investment Company Act”). From July 2021 through November 2024, Simplify caused its ETF clients to violate multiple provisions of the Investment Company Act by failing to maintain and implement adequate compliance policies and procedures and by failing to adequately oversee certain regulatory requirements. The SEC has imposed a cease-and-desist order and a $400,000 civil money penalty, which Simplify must pay within 21 days of entry of the order.
SEC Enforces Timely SAR Filing Requirements
Highlighting the importance of timely filing of Suspicious Activity Reports (“SARs”), the Securities and Exchange Commission (“SEC”) entered a settled order against UBS Financial Services Inc. (“UBSFS”), a registered broker-dealer and investment adviser incorporated in Delaware and with its principal place of business in Weehawken, New Jersey. The SEC found that UBSFS failed to timely file certain SARs, in violation of Section 17(a) of the Securities Exchange Act of 1934 (the “Exchange Act”) and Rule 17a-8 thereunder. As part of the settlement, UBSFS agreed to cease and desist from committing or causing further violations of the relevant provisions, was censured, and agreed to pay a $20 million civil monetary penalty to the SEC within 30 days of entry of the order.
SEC Proposes Update to E-Delivery Rules and Framework
The Securities and Exchange Commission recently proposed a new rule, Regulation E-Delivery, that looks to broaden the ability of financial industry professionals to deliver required compliance and regulatory information and documents to clients and proposed clients. If adopted, the proposed rule would modernize the regulatory framework by superseding the SEC’s current guidance for e-delivery while providing new requirements and conditions for electronic delivery. Continue reading ›
SEC Risk Alert Highlights Economic Conflicts of Interest: What RIAs Need to Know
The SEC Division of Examinations issued a Risk Alert earlier this month detailing examination observations related to investment adviser economic conflicts of interest. The alert serves as a reminder that the SEC continues to prioritize the review of compensation arrangements, revenue-sharing programs, fee practices, and disclosure obligations during adviser examinations.
For registered investment advisers (RIAs), the message is clear: firms should review their disclosures, billing practices, and compliance programs to ensure they adequately address conflicts that could influence recommendations made to clients. Continue reading ›
SEC Raises Threshold for Qualified Clients
The SEC recently announced its intent to issue an order that will adjust the dollar amount necessary to be considered a “qualified client” under Section 205(a)(1) of the Investment Advisers Act of 1940 (“Advisers Act”). This increase, adjusted to reflect inflation, raises the minimum net worth or dollar amount of assets under management necessary for an investment adviser to charge a performance fee to the client.
AI-Generated Documents Are Not Subject to the Attorney-Client Privilege, Court Rules
Many Parker MacIntyre clients enjoy the benefits of communications that can be shielded from discovery under the attorney-client privilege and, in some cases, under the work product doctrine. With changing technologies such as AI now prevalent, we now are beginning to see court decisions that analyze and clarify what documents are and are not privileged. A recent decision from a highly respected court weighs in on the scope of the privilege for AI-generated documents.
According to a February 10, 2026, decision of the U.S. District Court for the Southern District of New York, documents created by consumer AI-generation programs are not protected by the attorney-client privilege. In the case, a criminal defendant had generated multiple documents using the AI tool Claude prior to hiring his counsel, then gave those documents to his counsel in the course of seeking advice. Continue reading ›