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
Looking Ahead: The Red Flags Rules
Legal Risk Management Tips
December 29, 2008

In June of 2008, the Federal Trade Commission (FTC) and the federal banking regulators issued joint regulations implementing Sections 114 and 315 of the Fair and Accurate Credit Transactions Act of 2003 (FACT Act).1 Known as the “Red Flag Rules”, financial institutions and creditors with covered accounts are required to develop and implement written identity theft prevention programs for the detection, prevention, and mitigation of identity theft in connection with the opening of certain accounts or certain existing accounts.2 Enforceable in May 2009, the identity theft program must be able to detect, identify, and respond to indicators of possible fraudulent activity that, when detected, would prompt creditors to determine whether there is any fraudulent activity afoot.3

To be subject to the FTC’s rules, a securities institution must first fall within the FACT Act’s definition of either a “creditor” or a “financial institution”. A “creditor” is an entity that is regularly involved with the extension, renewal or continuation of credit.4 A “financial institution” includes banks, credit unions, savings and loans, but also any other person holding a transaction account either directly or indirectly belonging to a consumer.5 For this purpose, a “transaction account” means a deposit or account on which the depositor or account holder is permitted to make withdrawals by negotiable or transferable instrument, payment orders of withdrawal, telephone transfers, or other similar items for the purpose of making payments or transfers to third persons or others.6

Certain broker-dealers may fall under the definition of a creditor if they extend credit to customers as part of their regular business by allowing them to trade on margin. Other broker-dealers may be deemed a financial institution if they maintain custodial accounts which allow customers to make multiple account withdrawals for the purposes of payments and transfers to third parties. Similarly, some mutual funds allow investors to direct redemption payments to be made to third parties. This too would convert the fund into a transaction account and consequently make the fund a financial institution.

As long as a securities institution conducts activities causing it to fall under the FTC’s jurisdiction, all activities performed by that institution will be subject to the Red Flag Rules. For example, although most investment advisers do not maintain custody of client accounts or advance funds to clients as part of their advisory business, as true “dual registrant” (i.e. a firm registered both as a registered investment adviser and broker-dealer with the SEC) may need to comply if the firm’s broker-dealer business falls within the definition of a financial institution or creditor.

To be subject to the Red Flag Rules, the securities institution must not only fall within the definition of a creditor of financial institution but, also hold “covered accounts” for its customers. The term “covered account” means an account used primarily for personal, family or household purposes which allows for multiple transactions or payments as well as “[a]ny other account that the financial institution or creditor offers or maintains for which there is a reasonably foreseeable risk to customers or to the safety and soundness of the financial institution or creditor from identity theft, including financial, operational, compliance, reputation, or litigation risks.”7 In practice, most accounts held by securities firms or investment companies will fall within the definition of covered account. This is because personal and non-public information is used in opening and maintaining accounts or investment company interests and this poses a reasonably foreseeable risk of identity theft which is likely to qualify the account as a covered account for the purposes of the Rules

Similar to the proposed revised Regulation S-P, the Red Flags Rules allow businesses great flexibility in designing an identity theft prevention program suitable to the nature of a company’s business operations as well as appropriate for their size and capabilities.8 As guidance to assist businesses in designing and implementing a written identity theft prevention program, the FTC identified 26 possible red flag indicators to serve as examples for creditors to use as a starting off point. For more information regarding the possible red flag indicators, please visit http://edocket.access.gpo.gov/2007/pdf/07-5453.pdf.

Ordinary securities activities will not cause most institutions to fall into either category. However, if these institutions provide ancillary services or are registered as something other than a broker, dealer, investment company or investment adviser, it could still be caught by these provisions. Regardless of whether the firm is indeed subject to the FTC’s jurisdiction, all securities firms should pay close attention to the Red Flags Rules. When considering its proposals to amend Regulation S-P, the SEC looked at the regimes imposed by its fellow regulators in an attempt to promote consistency between its rules and guidelines and those of the other federal agencies that oversee the financial services industry. Many of the proposed changes to Regulation S-P discussed above appear to closely resemble certain rules of the FTC. It is therefore possible that the SEC may take its cue from the Red Flag Rules and impose similar requirements on securities firms, either in further revisions to Regulation S-P or in future regulations. In the meanwhile, be sure you are prepared for the enforcement of these Red Flags Rules in 2009.

Author: Michelle Jacko, Managing Partner, Jacko Law Group, PC (“JLG”). JLG works extensively with investment advisers, broker-dealers, investment companies, hedge funds and banks on legal and regulatory compliance matters.

For more information about this topic and other legal services, please contact us at (619) 298-2880, info@jackolg.com or visit www.jackolg.com. Thank you.

This article is for information purposes and does not contain or convey legal advice. The information herein should not be relied upon in regard to any particular facts or circumstances without first consulting with a lawyer.

1 FTC Business Alert, New ‘Red Flag’ Requirements for Financial Institutions and Creditors Will Help Fight Identity Theftavailable at http://www.ftc.gov/bcp/edu/pubs/business/alerts/alt050.shtm.

2 16 C.F.R. § 681.2.

3 Supra, note 1.

4 16 C.F.R. § 681.2(b)(5).

5 15 U.S.C. § 1681a(t).

6 12 U.S.C. § 461(C).

7 16 C.F.R. § 681.2(b)(3).

8 Supra, note 1.

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