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RIA Compliance Blog

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FINRA Addressing Self-Trading in New Rule

Earlier this month, the SEC approved FINRA’s rule change addressing the limitation and monitoring of self-trading in SEC Release No. 34-72067. FINRA Rule 5210 will put restrictions on self-trading activity that occurs as a result from one or related algorithms or that originate in one or related trading desks. Self-trading,…

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Target Date Mutual Funds: Proposed Rules and Recommendations

On April 3, 2014, the SEC asked for comments on proposed Rule 33-9570, titled “Investment Company Advertising: Target Date Retirement Fund Names and Marketing.” The SEC had originally proposed and accepted comments on this rule in 2010, but it never took action on the proposal. “Target date funds” are a…

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SEC Investment Advisor 2014 Compliance Outreach Program

On January 30, 2014, the Securities and Exchange Commission hosted a compliance outreach program for investment companies and investment advisors. The national seminar, which was jointly sponsored by the Office of Compliance Inspections and Examinations and the Asset Management Unit of the Division of Enforcement, was held at the SEC…

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SEC Announces Plans to Examine Never-Before Examined RIAs

On February 20, 2014, the Securities and Exchange Commission announced that it is launching an initiative, through its Office of Compliance Inspections and Examinations (“OCIE”), to conduct examinations of investment advisers that have been registered with the SEC for 3 or more years but who have never been examined. That…

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Public Solicitations on Rule 506 offerings

Several Congressmen and an SEC Commissioner have independently urged the SEC to move forward with adopting proposed rules that impose additional requirements on public solicitations of Rule 506 offerings. At the same time that the SEC finalized its initial rulemaking on the subject last September, it proposed additional rules that…

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SEC Enforcement Actions in 2013

The SEC has released the results of the 686 2013 enforcement actions it filed in federal court, which resulted in $3.4 billion in sanctions against offenders. Of the $3.4 billion, securities violators were required to disgorge illegal profits of approximately $2.257 billion and pay penalties of approximately $1.167 billion. The…

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SEC Proposes More Rules and Oversight for Public Rule 506 Offerings

On the same day that it released rule amendments allowing some Rule 506 offerings to be sold through public solicitation, the SEC proposed an additional set of rule amendments for those offerings. While the newly adopted rule primarily concerns verification of accredited investor status, the additional proposals relate more to…

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Trust, but Verify: Public 506 Offerings Finally Approved, With Conditions

The Securities and Exchange Commission (“SEC”) recently adopted long-awaited rule changes required by the 2012 Dodd-Frank Act that will allow some offerings under Rule 506 to be offered using general solicitation. At the same time, the SEC proposed a set of additional changes that would further regulate this new type…

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California Court Decision May Allow Brokers to Expunge Their Records More Easily

In a decision last month, the California Court of Appeals may have opened the door for brokers to bypass the Financial Industry Regulatory Authority’s (FINRA) rigid expungement rules in order to remove matters from their CRD records. Currently, brokers must abide by Rule 2080 in order to expunge their records.…

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States Report RIA Enforcement Cases Doubled in 2011

The North American Securities Administrators Association (NASAA) released preliminary numbers this month showing that the number of enforcement cases brought by state regulators doubled during 2011. During that year, states brought about 400 cases compared to 208 cases brought during 2010. This increase is due in large part to an…

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