Jacko Law Group, PC
Call Today for a Consultation
San Diego 619-298-2880 San Francisco 415-766-3599 Los Angeles 213-631-2549

States Toughening Up and Cracking Down on RIAs

In 2012, states expanded their oversight of registered investment advisers (“RIAs”) from those with $25 million in assets, to those with $100 million or less.  Prior to 2012, the Securities and Exchange Commission (“SEC”) had been responsible for overseeing these RIAs.

Since taking on the oversight of these additional RIAs, state securities regulators have seen a sharp increase in deficiencies actions.  A new report from the North American Securities Administrators Association (“NASAA”) recounted how Investment Adviser (“IA”) exams from 2011 to 2013 increased by 37% (from 825 to 1,130), while the number of deficiencies found during such exams surged by 83% (from 3,543 to 6,482).  To make these numbers even more eye-popping, one must bear in mind that the staggering number of state deficiencies for 2013 (6,482) only represent the first six months of this year.

While it unclear exactly how many of these violations result from IA firms formerly registered with the SEC and are now subject to state oversight, it is clear that states are conducting thorough examinations, and are finding deficiencies in a multitude of areas.  According to NASAA’s report, the top categories for deficiencies were:

  • Books and records – i.e., missing suitability documentation, client contracts, disclosure brochures, etc.;
  • Registration deficiencies - i.e., incorrect or incomplete Form ADV filings, untimely filing of amendments, etc.;  and
  • Contract deficiencies – i.e., not properly executed, missing fee and fee formula disclosures, etc.;

There were also several deficiencies regarding regulations concerning privacy, brochure delivery, advertising, fees, supervision and custody.  These findings presented by NASAA show that importance of understanding and adhering to those state rules and regulations that apply to your RIA firm.  Failure to do so may result in deficiency actions, penalties, fees and even criminal enforcement actions. 

For further information on this, or other related topics, please contact us at [email protected] or (619)298-2880.  

No Comments

Leave a comment
Comment Information
Email Us For A Response

How Can We Help?

Email us to request more information or to schedule an appointment.

Bold labels are required.

Contact Information

The use of the Internet or this form for communication with the firm or any individual member of the firm does not establish an attorney-client relationship. Confidential or time-sensitive information should not be sent through this form.


Privacy Policy

San Diego Office
1350 Columbia Street
Suite 300
San Diego, CA 92101

Toll Free: 866-497-2298
Phone: 213-631-2549
Phone: 619-298-2880
Fax: 619-298-2882
Map & Directions

San Francisco Office
Four Embarcadero Center
Suite 1400
San Francisco, CA 94111

Phone: 213-631-2549
Phone: 415-766-3599
Fax: 619-298-2882
Map & Directions

Los Angeles Office
535 N. Brand Boulevard
Suite 270
Glendale, CA 91203

Phone: 213-631-2549
Fax: 619-298-2882
Map & Directions