M. Jacko
Managing Partner and CEO

Michelle L. Jacko, Esq.

Managing Partner and CEO

Michelle L. Jacko, Esq. is the Managing Partner and CEO of Jacko Law Group, PC (“JLG”), which offers securities, corporate, real estate, and employment law counsel to broker-dealers, investment advisers, investment companies, hedge/private funds and financial industry professionals. In addition, Ms. Jacko is the Founder and CEO of Core Compliance & Legal Services, Inc., a compliance consultation firm.

Ms. Jacko specializes in investment adviser, broker-dealer, investment company and private fund regulatory compliance matters, internal control development, regulatory examinations, transition services, and operational risk management. Her consultation practice is focused on the areas of regulatory exams and formal inquiries, investment and merger and acquisition transactions, exit and succession planning, annual reviews, policies and procedures development, testing of compliance programs (including evaluation of internal controls and supervision), mock exams, senior client issues, cybersecurity, Regulation S-P, and much more.

Over the years and through a transformative market, Ms. Jacko has also developed service solutions throughout her practice, focusing on regulatory, compliance, commercial and corporate strategic solutions for the financial industry. Her practice focuses on formations and registration of broker-dealers, investment advisers and funds and platforms associated with each of these business models.  She focuses on transition and succession planning for companies, spearheading Jacko Law Group’s mergers and acquisitions practice area. She aligns her legal team to directly apply experienced legal acumen and business-savvy foresight to assist clients navigate and traverse the breakaway, formation, and growth plan for their corporation’s continued achievement, expansion, and upward trajectory.

Throughout this process, Ms. Jacko uses her 27 years of regulatory compliance experience to provide risk mitigation strategies to businesses.  She provides her clients with risk assessments, annual reviews and gap analysis, and serves as lead attorney for SEC and FINRA enforcement matters, regulatory formal inquiries, and regulatory examinations.  She has developed a practice that successfully helps our clients to be prepared for examinations through meticulous preparations, including mock interviews, compliance program document reviews, and counsel to members of senior management and interfacing with regulators throughout the process.   She frequently provides counsel on Chief Compliance Officer liability issues, assists advisors with regulatory reporting of disciplinary events and customer complaints, provides counsel on various representative onboarding and exit considerations and drafts complex agreements and client disclosure documents.

Utilizing an unparalleled service with a visionary strategy, Ms. Jacko’s counsel contributes to client success. She fosters trust amongst her team and has forged a path for JLG’s growing and multifaceted merger and acquisition practice, general corporate counsel services and regulatory compliance practice areas.

As a frequent presenter at national financial industry conferences, Ms. Jacko delivers insightful and thought-provoking workshops regarding industry hot topics and rising compliance issues. She is a frequent contributor to various industry journals and publications, including Barron’s Advisor, Charles Schwab, Investment Adviser Association’s IAA Today, National Society of Compliance Professionals’ CurrentsLawyer Monthly MagazineThomson Reuters, and more.  She also is a featured author in Modern Compliance, Vol. 1 and 2.

Ms. Jacko served as the former Vice-Chair of Education of the Corporations Committee for the State Bar of California Business Law Section and is a two-time Board member alumn of the National Society of Compliance Professionals. She is the Co-Founder and a member of the Southern California Compliance Group and also is a FINRA Arbitrator. Ms. Jacko is a member of Vistage International and actively participates in her community.

JLG and Ms. Jacko are proud to be members of the National Women Business Owners (NABWO) Corporation.

Throughout her career, Ms. Jacko has established herself as an influential leader, both locally and industry-wide. She has received numerous accolades and recognitions for her contributions, impact, and thought leadership. Since 2019, she has been selected as a finalist for San Diego Business Journal’s (SDBJ) CEO of the Year Award (2019-2022). She has also been selected for inclusion for the SDBJ’s 2022 Women of Influence 50 over 50, 2021 -2022 Women of Influence in Law SDBJ’s 2018-2022 Business Woman of the Year, 2020-2022 San Diego 500 Influential Business Leaders Award, 2020-2022 SD500, and prestigious 2020 Most Admired CEO Awards. Alongside the many awards from the SDBJ, Ms. Jacko  also was selected as a finalist for San Diego Magazine’s 2020–2021 Influential Women: Woman of the Year Award and was honored as a finalist for the 2019 NAWBO Bravo Awards - San Diego. International magazine CEO Today also selected Ms. Jacko as one of the 2019 and 2020 Business Women of the Year Awards. She also received Acquisition International magazine's Global Excellence Awards: Most Influential Woman in Securities Law 2019–2020 - San Diego, and locally was selected by San Diego Metro as one of the 12 Women of Influence in San Diego, CA.

Before starting both companies, Ms. Jacko previously served as Of Counsel at Shustak & Partners, PC. Prior to that, she was Vice President of Compliance and Branch Manager of the Home Office Supervision team at LPL Financial Services, Corporation (Linsco/Private Ledger). She also served as Legal Counsel of Investments and Chief Compliance Officer at First American Trust, FSB and held the position of Compliance Manager at Nicholas-Applegate Capital Management. In addition, Ms. Jacko was with PIM Financial Services, Inc., and Speiser, Krause, Madole & Mendelsohn, Jackson.

Ms. Jacko received her J.D. from St. Mary’s University School of Law and B.A., International Relations, from the University of San Diego. She is admitted to the State Bar of California and United States District Court, Southern District of California. Michelle holds NSCP’s Certified Securities Compliance Professional (CSCP) designation and is a member of the National Association of Women Lawyers (NAWL).

In addition to her many accomplishments, Ms. Jacko is also dedicated to giving back to her community and charitable organizations. Throughout the years she has dedicated her time and efforts to numerous organizations, including the Autism Tree Project, Wounded Warriors Project, the ASCPA, the San Diego Food Bank, School of the Madeleine and more. She also supports whenever she can the military community.  It is her dedication to her team, her practice and her community that has laid the foundation for JLG’s impact and continued growth and success.

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Practices :
Mergers & AcquisttionsPrivate Equity & Private Fund ServicesSEC/State: Regulatory Compliance Services
An Important Lesson About Marketing Materials and Risk
Blog IA Marketing Rule Counsel
March 18, 2020

One of the hallmarks of a fiduciary is following through on the service you promise to deliver, acting in the best interests of your client, and providing factual information.

When that doesn’t happen, billions of dollars in assets are involved, and clients are harmed, the Securities and Exchange Commission (SEC) steps in to protect investor rights.

On January 27, 2020, the SEC announced charges against Catalyst Capital Advisors LLC (CCA), a New York-based investment adviser, for misleading investors about the management of risk in its Catalyst Hedged Futures Strategy Fund.

The SEC’s complaint cited Catalyst President and CEO Jerry Szilagyi for a lack of oversight and a failure to take corrective action when Senior Portfolio Manager Edward Walczak fraudulently misrepresented how he would manage risk for the Fund through material misstatements and omissions and breaches of fiduciary duty.

Irresponsible Marketing Content

A core selling point of the Catalyst Hedged Futures Strategy Fund as cited in its marketing materials was a risk management process devised to limit the extent of any losses. Walczak and Catalyst highlighted “aggregate portfolio stop-loss measures” designed to prevent losses of more than 8% as a distinguishing feature of the Fund in fund prospectuses, on conference calls, in due diligence questionnaires, and in wholesaler talking points to investors and advisors.

The marketing of the Fund’s risk management was a contributing factor in its rapid growth from $7 million in assets under management from September 2013 to more than $4 billion by November 2016. Walczak directly benefited from the Fund’s asset growth as his compensation was tied to the size of the Fund’s assets under management. He was paid more than $24 million in 2016 alone.

The absence of the stop-loss system promised investors became apparent between December 2016 and February 2017, when the Fund lost $700 million, or approximately 20% of its net asset value.

During this same time period, the Fund’s benchmark, the Standard & Poor’s 500 Total Return Index (“S&P 500”), increased approximately 8%. Not surprisingly, retail investors questioned Catalyst wholesalers whether Walczak had managed risk as he had promised and demanded to know what had happened to the 8% maximum drawdown figure they were told about.

One investment adviser who had allocated millions of dollars of its clients’ assets to the Fund determined that Walczak had “made a large directional bet that was inconsistent with his investment process as we understood it.” In its complaint, the SEC said it had determined that Walczak had knowingly or recklessly made or substantially participated in making misrepresentations and omissions of material fact.

Insufficient Oversight

Walczak, who was at his home in California at this time, did not send a reply to either text. The next day, Szilagyi emailed Walczak, again expressing concern about the adequacy of Walczak’s risk metrics, stating “Our shareholders just will not tolerate a 4+% drawdown on a day the market moves less than 1%. We need to consider making adjustments given the current market conditions and shareholder base. We can start with a call but I think an in-person meeting is warranted.”

Walczak did not adjust his risk metrics or meet with Szilagyi as suggested in the email, at this time or in the following weeks. Walczak traveled from his home in California to his home in Hawaii on January 30, 2016, and remained there until February 18, 2017. In the end, the SEC cited Szilagyi for a lack of oversight in his position as President and CEO.

Let our Experience Work for You

“Disclosures about what you do and how you will do it, do matter,” says Michelle L. Jacko, Esq., Managing Partner of Jacko Law Group. “The key takeaway here is to be sure your marketing materials align with what you are actually going to do…keeping in mind that material omissions will find you in violation of the anti-fraud provisions, and enforcement actions likely will soon follow.”

Jacko Law Group can help your firm in a variety of situations. Contact our team of attorneys today.

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