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Protecting Your Clients from Fraudulent Investment Schemes: A Guide for Financial Professionals

February 27, 2025 by

As a broker-dealer, registered investment adviser (RIA), or investment adviser representative (IAR), your clients trust you to navigate the complex financial landscape on their behalf. Unfortunately, fraudsters pose an ever-present threat, using sophisticated tactics to deceive even seasoned financial advisors and investors. Recognizing red flags, conducting due diligence, and effectively communicating with clients on how they can protect themselves are crucial steps in safeguarding their assets and satisfying your fiduciary duty obligations. This month’s Risk Management Tip explores how financial professionals can protect clients from fraudulent investment schemes.… Read More

Investment Adviser Regulatory Counsel (SEC & State) | Investment Advisers | Investment Companies | Legal Risk Management Tips | Regulatory Compliance | Regulatory Examinations & Enforcement Counsel | RIA, Private Fund, BD, etc.

Introduction to Security Token Offerings: What You Need to Know

January 31, 2025 by

With the financial sector constantly evolving, it is important to stay abreast of new investment vehicles.
Even if you’re not yet ready to embrace these offerings, your clients will likely have questions as these offerings gain popularity. Among the newest type of offerings that we anticipate gaining market traction in the long term are Security Token Offerings (“STOs”).
… Read More

Investment Adviser Regulatory Counsel (SEC & State) | Investment Advisers | Investment Companies | Legal Risk Management Tips | Regulatory Compliance | Regulatory Examinations & Enforcement Counsel | RIA, Private Fund, BD, etc.

Top SEC Enforcement Actions of 2024 and What Investment Advisers and Broker-Dealers Can Learn from Them

December 20, 2024 by

The U.S. Securities and Exchange Commission (“SEC”) continued to play a vital role in ensuring firms’ compliance with securities regulations in its mission to protect investors and promote transparency. In 2024, enforcement actions resulted in a record-breaking $8.2 billion in financial remedies. Interestingly, the number of enforcement actions dropped by 26% compared to 2023, as the SEC adopted a new strategy of high-impact actions and promoting self-reporting.

Areas that received the most scrutiny this year included emerging technology and alternative currency, off-channel communications, and cybersecurity.

This month’s Risk Management Tip focuses on five key SEC enforcement actions and violations of 2024, and how investment advisers, broker-dealers, and others can use these lessons to enhance their compliance programs and avoid costly mistakes.… Read More

Blog | Due Diligence Counsel | FINRA Broker-Dealer Regulatory Counsel | Investment Adviser Regulatory Counsel (SEC & State) | Investment Advisers | Investment Companies | Regulatory Compliance | Regulatory Filings | RIA, Private Fund, BD, etc.

Key Compliance Considerations for Third-Party Vendor Oversight

December 18, 2024 by

FINRA and the SEC focus on protecting clients’ interests by covering all potential risk areas that could harm investors.

One pivotal area for financial firms to consider is their due diligence efforts related to third-party service providers. Third-party service providers are an extension of your firm. Regardless of whether the vendor is deemed critical or non-critical (Read more on this here), if not properly vetted and continuously supervised, weak controls by your vendor can expose your firm, and by extension, your clients to a range of risks.
… Read More

Blog | FINRA Broker-Dealer Regulatory Counsel | Formation Services | Investment Adviser Regulatory Counsel (SEC & State) | Investment Advisers | Investment Companies | Regulatory Compliance | Regulatory Examinations & Enforcement Counsel | Regulatory Filings | RIA, Private Fund, BD, etc.

Potential Impact of the CTA Enforcement Ban in Texas Top Cop Shop v. Garland et al.

December 13, 2024 by

On December 3, 2024, the U.S. District Court for the Eastern District of Texas filed a preliminary injunction blocking the enforcement of the Corporate Transparency Act (CTA), which mandates companies disclose beneficial ownership information. This injunction was issued in response to the case, Texas Top Cop Shop v. Garland et al. (Case 4:24-cv-00478). Texas Judge Mazzant, who issued the judgment, ruled that corporate regulation falls under state jurisdiction, not federal.
… Read More

Investment Adviser Regulatory Counsel (SEC & State) | Investment Advisers | Investment Companies | Legal Risk Management Tips | Regulatory Compliance | RIA, Private Fund, BD, etc.

Privacy, Cybersecurity, and Other Protections for Investors

November 27, 2024 by

Structuring a business strategically plays a major role in optimizing benefits and in protecting the business from potential issues.  Another important facet of strategically structuring a business is to plan for the unexpected and put in place safety nets and contingency plans in the event of a business threat. This is the core principle of risk mitigation. What happens if a business owner is unable or unwilling to pay off a personal debt? Can creditors come after their business assets? It depends.… Read More

Blog | FINRA Broker-Dealer Regulatory Counsel | Formation Services | Investment Adviser Regulatory Counsel (SEC & State) | Investment Advisers | Investment Companies | Regulatory Compliance | Regulatory Examinations & Enforcement Counsel | Regulatory Filings | RIA, Private Fund, BD, etc.

SEC Releases EXAMS Priorities for 2025

October 23, 2024 by

On Oct. 21, 2024 , the US Securities Exchange Commission (“SEC”) published a press release announcing their 2025 Examination Priorities. Many of the focus areas come as no surprise, as the SEC has diligently alerted industry and investors alike to what their areas of concern have been throughout the year. There are, however, a few areas that registrants may find require an extra review or a deeper dive.… Read More

Industry Publications | Investment Advisers | Investment Companies | Regulatory Compliance | Regulatory Examinations & Enforcement Counsel | RIA, Private Fund, BD, etc.

Regulatory Focus On Off-Channel Communications: What You Need to Know for Your Compliance Program

October 15, 2024 by

Director of Operations and Counsel Kathryn Konzen, Esq. explores the vulnerabilities to cyberattacks in the financial sector in the article titled “Cybersecurity: Regulatory Compliance, Attacks, and Risk Mitigation,” published in GRC Outlook. The article offers insight into why the sector remains a target for cybercriminals and how to mitigate cyber risks.… Read More

Blog | FINRA Broker-Dealer Regulatory Counsel | Formation Services | Investment Adviser Regulatory Counsel (SEC & State) | Investment Advisers | Investment Companies | Regulatory Compliance | Regulatory Examinations & Enforcement Counsel | Regulatory Filings | RIA, Private Fund, BD, etc.

Private Funds Adviser Charged for Integration Doctrine Violations

October 15, 2024 by

The Securities Exchange Commission (“SEC”) recently charged a Private Funds Adviser for violations of the Registration and Custody rules, specifically as they relate to integration doctrines.

This is the first SEC enforcement action in over ten years against an Investment Adviser for violations against the Integration Doctrine. The Integration Doctrine is set forth in Rule 152 of the Securities Act of 1933 and prevents the separating of single offerings into multiple offerings to take advantage of exemptions that would otherwise not be available if the offering was not divided.… Read More

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