Last week the Securities and Exchange Commission issued Proposed Amendments to the “internet adviser” basis for SEC registration found in Rule 203 A-2 (e). Currently, the rule provides that an adviser who provides investment advice nearly exclusively via an interactive website is eligible to register with the SEC, as long…
On June 13, 2022, the Securities and Exchange Commission (“SEC”) issued an order instituting administrative and cease-and-desist proceedings against Charles Schwab & Co., Inc. (“CS & Co.”), Charles Schwab Investment Advisory, Inc. (“CSIA”), and Schwab Wealth Investment Advisory, Inc. (“SWIA”), (collectively, “Schwab subsidiaries”) who submitted an offer of settlement without…
On June 3, 2020, the U.S. Securities and Exchange Commission filed suit against a company claiming to be an internet-only investment adviser, based on the firm’s failure to respond to a request for documents and information, in violation of the Investment Advisers Act and rules. The company, E*Hedge Securities, Inc.,…
In our previous post, we described the SEC’s announcement of examination priorities in 2020 for the Commission’s Office of Compliance Inspections and Examinations (OCIE). In that post, we discussed areas of examination that will apply to a large percentage of registered investment advisors and other regulated entities. In this post,…
Demonstrating its regulatory interest in the robo adviser industry, on December 21, 2018, the Securities and Exchange Commission issued an Order Instituting Administrative and Cease-and-Desist Proceedings against Wealthfront Advisers, LLC, a registered investment adviser which uses a software-based “robo adviser” platform in servicing its clients. The action is the second…
On December 21, 2018, the Securities and Exchange Commission issued an Order Instituting Administrative and Cease-and-Desist Proceedings against Hedgeable, Inc., a registered investment adviser. Hedgeable utilizes a “robo adviser” program, which it offers to individuals, small business owners, trusts, corporations, and partnerships through both its website and social media. The…
The Massachusetts Securities Division (the “Division”) recently issued a policy statement in which it stated, “It is the position of the Division that fully automated robo-advisers, as currently structured, may be inherently unable to carry out the fiduciary obligations of a state-registered investment adviser.” According to the Division, robo-advisers are…