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
Social Media in 2021 – Are Advisers Subject to the Old Rules or New Rules, and What Then? (Part 2)
IA Marketing Rule Counsel Legal Risk Management Tips
March 18, 2021

In last month’s article, we highlighted the highly anticipated New Marketing Rule and the implications and impacts it may have on the financial industry as it relates to social media usage.  Among other things, the permitted use of testimonials will forever change the way investment advisers advertise by allowing consumers to share their experience with a particular adviser.  Moreover, the “new” definition of advertising provides for principles-based regulation in a broad context, to be applied to our ever-changing electronic media and mobile communications environment.  Now published in the Federal Register, the New Marketing Rule goes into effect on May 4, 2021, with a compliance date of November 4, 2022.

But between now and then, what should advisers do?

This month’s Legal Risk Management Tip will focus on addressing this question. As historic SEC guidance continues to apply until an advisory firm complies with the New Marketing Rule or November 4, 2022 (whichever is sooner) it is critically important to evaluate how the firm is complying with the old standards and consider how the firm will comply with the new standards once they do go into effect. Throughout, we will provide tips and suggestions on how can enhance and advance your social media program in 2021 and in the future.

Currently, Historical SEC Guidance and Best Practices Provided on Social Media Still Apply

While the New Marketing Rule will impact advisers’ use of social media, much of the historic guidance provided by the Commission Staff previously remains applicable and should be considered as advisers continue to modify and enhance policies and procedures related to social media use by the advisory firm and its supervised personnel.

Advisers’ social media activities are governed by the antifraud provisions found in the Advisers Act. Section 206 of the Advisers Act provides, “[i]t shall be unlawful for any investment adviser…to engage in any transaction, practice or course of business which operates as a fraud or deceit upon any client or prospective client.” Before the SEC issued the 2014 Guidance Update, there was limited direction on compliance and recordkeeping requirements for investment advisers’ use of social media, other than FINRA’s Regulatory Notices, which do not apply to advisers, absent dual registration.

The 2012 Risk Alert alerted investment advisers on the integral value of adopting and reviewing whether social media policies and procedures were effective and specific to the firm and its practices (such as detailing which social networking activities are permitted or prohibited by the organization and its solicitors). The SEC suggested various factors that advisers should consider when developing and evaluating those internal controls surrounding social media use by the firm, its investment adviser representatives and solicitors, which include:

  • Usage Guidelines
  • Content Standards
  • Monitoring and Frequency of Monitoring
  • Approval of Content
  • Firm Resources
  • Criteria for Approving Participation
  • Training
  • Certification by Employees
  • Functionality of Sites
  • Personal/Professional Social Media Sites
  • Enterprise-Wide Sites
  • Information Security

This guidance still applies today. Practically speaking, as advisers continue to use social media, they must: 

  • Adopt policies and procedures customized to the firm’s social media usage;
  • Review third-party content for integration and entanglement considerations and weigh, based on facts and circumstances, if disclosures or other actions need to be taken;
  • Focus on supervisory techniques to monitor compliance with the firm’s social media policies; and
  • Maintain required books and records relating to social media.

These financial industry best practices were reiterated by the 2014 Guidance Update. The SEC stressed the need to look at social media practices on a facts and circumstances basis and provided that, “any arrangement whereby the investment adviser or investment adviser representative (‘IAR’) compensated the independent social media site, including with advertising or other revenue, in order to publish or suppress the publication of anything less than the totality of the public commentary submitted could render any use by the IAR or investment adviser on its social media site violative of the prohibition on testimonials.” Thus, compliance programs must take due care to understand the nature of the relationship between the investment adviser and the social media site. This analysis should include review of any compensation arrangement and the adviser’s ability to suppress information. Once known, compliance policies, training and guidance on do’s and don’ts can be developed and communicated to advisory personnel to help prevent violations of the Advisers Act. By way of example, based on a firm’s social media practices, some advisers have adopted specific policies for monitoring and hiding endorsements on LinkedIn.

Fast-forward to 2020, in response to COVID-19, the Staff cautioned advisers to take steps to evaluate how their businesses have changed – operationally, technologically and commercially. In particular, the SEC asked advisers to review their policies and procedures and enhance compliance monitoring. Once again, the SEC cautioned that they had concerns with deficiencies they found related to advertising, both generally (due to supervisory deficiencies) and remotely (by branch offices). The SEC suggested in the Multi-Branch Risk Alert that compliance programs take into consideration:

  • Whether presentations are omitting material disclosures;
  • Whether materials include superlatives or unsupported claims;
  • Whether the credentials or experience of supervised persons are falsely stated; and
  • Whether third-party rankings omitted material facts related to these accolades.

In the Compliance Programs Risk Alert, the SEC’s Examinations Division also shared weaknesses they witnessed regarding how policies and procedures were tailored as the policies and procedures related to:

  • Overseeing solicitor arrangements;
  • Preventing misleading marketing information, including websites; and
  • Overseeing the use and accuracy of performance advertising.

Nearly all of these areas can be addressed by employing internal controls that were set forth in the 2014 Guidance Update. Namely, compliance programs should establish content standards, frequently monitor materials and set forth training for the firm and its supervised persons to help reiterate compliance standards and practices.

Practical Tips for Advancing Your Social Media Compliance Program

As discussed above, the social media environment and the regulations that govern electronic media are continuing to evolve. Below are steps firms can take now to help advance their social media compliance program. These practical steps will be equally applicable once the New Marketing Rule goes into effect.

  1. Implement detailed written policies and procedures that outline the acceptable use of social media for business purposes, including what systems (e., company issued versus personal electronic devices) are acceptable for use when posting, being sure to provide clear guidance on supervisory responsibilities.
  2. Provide extensive training and education to employees on your firm’s policies for using social media for business communications, including examples of what they can and cannot do (such as posting articles on LinkedIn).
  3. Perform and document initial and periodic detailed due diligence on the third-party vendors that provide data feeds to the firm’s social media sites.
  4. Develop protocols to check that information posted to social media sites is correct, timely, and accurate and consider adding disclosures when clicking on links to third-party sites.
  5. Use technology solutions to capture all required books and records for social media sites.
  6. Develop forensics for testing the effectiveness of your compliance controls for social media usage and refine as necessary.

Author: Michelle L. Jacko, Managing Partner of Jacko Law Group, PC (“JLG”). Editor: JLG works extensively with investment advisers, broker-dealers, investment companies, private equity and hedge funds, banks and corporate clients on securities and corporate counsel matters.  For more information, please visit https://www.jackolg.com/.

The information contained in this article may contain information that is confidential and/or protected by the attorney-client privilege and attorney work product doctrine. This email is not intended for transmission to, or receipt by, any unauthorized persons. Inadvertent disclosure of the contents of this article to unintended recipients is not intended to and does not constitute a waiver of attorney-client privilege or attorney work product protections.

The Risk Management Tip is published solely based off the interests and relationship between the clients and friends of the Jacko Law Group P.C. (“JLG”) and in no way be construed as legal advice. The opinions shared in the publication reflect those of the authors, and not necessarily the views of JLG. For more specific information or recent industry developments or particular situations, you should seek legal opinion or counsel.

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