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Communiques

The latest compliance news from SEC3 and CCO3.

SEC Charges Private Equity Manager in First Ever Case Over Allocation of Broken Deal Expenses

July 07, 2015

The Securities and Exchange Commission recently charged a private equity firm for misallocating more than $17 million of “broken deal” expenses. Broken deal expenses are those associated with identifying, researching and negotiating potential investment opportunities that do not materialize as actual investments. Such expenses can be significant, and typically include research costs, travel costs and professional fees.

Read more: SEC Charges Private Equity Manager in First Ever Case Over Allocation of Broken Deal Expenses

 

What the SEC’s New Cybersecurity Guidance Means for Investment Advisers and Investment Companies

July 01, 2015

By Janaya Moscony, CFA; Irshad Karim; Linda Smith; Claire Owens, SEC Compliance Consultants

Published: NSCP Currents May 2015

The SEC has made cybersecurity a significant point of interest for 2015 through their examination priorities and guidance released to the public in the first half of this year. The SEC finds cybersecurity as a serious issue across the board and expects funds and advisers to have a plan that addresses the risks associated with cybersecurity and to have in place controls to mitigate the risks.

In this article, SEC3 outlines a variety of best practices that investment advisers and investment companies can incorporate into their current policies and procedures to be prepared in the event of a security breach.

Read more: What the SEC’s New Cybersecurity Guidance Means for Investment Advisers and Investment Companies

 

SEC Sanctions Investment Adviser for Failure to Devote Resources to Compliance Function

June 25, 2015

The SEC recently settled a proceeding brought against an investment adviser firm, its former President, and other principals at the firm where the compliance function was not adequately staffed and not adequately resourced. An independent compliance consultant and the SEC staff subsequently identified a number of compliance violations during an examination of the firm that had not been previously detected by the firm or its Chief Compliance Officer.

Read more: SEC Sanctions Investment Adviser for Failure to Devote Resources to Compliance Function

 

SEC Proposes Extensive Amendments to Form ADV as Well as New Reporting Requirements for RIAs and RICs

June 03, 2015

On May 20, 2015, the SEC unanimously approved extensive proposed amendments to Form ADV that, if adopted, would require registered investment advisers to provide new information, including additional disclosure relating to separately managed accounts (“SMAs”) similar to the information currently required for private funds under Form PF.

Read more: SEC Proposes Extensive Amendments to Form ADV as Well as New Reporting Requirements for RIAs and RICs

 

SEC Continues Heavy Focus on Private Equity

May 22, 2015

The SEC is continuing to focus heavily on the private equity sector, reminding advisers in this space to be mindful of their practices. On May 13, 2015, Mark Wyatt, Acting Director, Office of Compliance Inspections and Examinations (“OCIE”) spoke to Private Equity International about the changes that have come and how OCIE anticipates going forward in the private equity arena. Much of Mr. Wyatt’s remarks reiterated the issues highlighted by Andrew Bowden, Director, Office of Compliance Inspections and Examinations, in his highly publicized speech on “Spreading Sunshine in Private Equity” last year.

Read more: SEC Continues Heavy Focus on Private Equity

 

SEC Issues New Cybersecurity Guidance for Investment Advisers and Investment Companies

May 01, 2015

The SEC’s Division of Investment Management recently released new guidance to registered investment advisers and investment companies regarding cybersecurity. The SEC has previously identified cybersecurity as an important issue and continues to reiterate advisers’ need for a suitable plan with respect to cybersecurity.

Read more: SEC Issues New Cybersecurity Guidance for Investment Advisers and Investment Companies

 

Your CCO May Now Have An Incentive to Turn You In

April 22, 2015

The Securities and Exchange Commission today announced an award of more than a million dollars to a compliance officer who believed that disclosure to the SEC was necessary to prevent imminent misconduct from causing substantial financial harm to the company or investors.

Read more: Your CCO May Now Have An Incentive to Turn You In

 

SEC Charges Advisor with Failing to Disclose Conflict of Interest to Clients and Fund Boards

April 21, 2015

The SEC has charged an advisor with failing to disclose a conflict of interest to their clients and fund boards. In this significant case, the SEC alleges that the firm violated Rule 38a-1 and breached its fiduciary duty by failing to either eliminate the conflict of interest created by the outside business activity of a top-performing portfolio manager, or to disclose the conflict to the relevant fund board or advisory clients.

Read more: SEC Charges Advisor with Failing to Disclose Conflict of Interest to Clients and Fund Boards

 

SEC Warns of Using Confidentiality Language to Stifle Whistleblowers

April 06, 2015

On April 1, 2015, the Securities and Exchange Commission announced its first ever enforcement action against a company for violating Dodd Frank’s whistle blower rules. In this case, the company was found to have required employees to sign a form confidentiality statement when the company conducted internal investigation interviews.

Read more: SEC Warns of Using Confidentiality Language to Stifle Whistleblowers

 

SEC Reminds Advisers of the Need for Gifts and Entertainment Policies

March 25, 2015

In February 2015, the SEC’s Division of Investment Management issued guidance to the public with respect to the conflict of interest that arises when individuals and firms doing business, or hoping to do business, with a fund or investment adviser provide gifts, entertainment, favors or other forms of consideration to employees of the fund or adviser.

Read more: SEC Reminds Advisers of the Need for Gifts and Entertainment Policies

 

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Newsletter

Get the latest compliance news and insights - delivered weekly. The SEC3 Communique covers all compliance topics. CCO3 focuses on Mutual Fund CCO topics.
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Communiques

SEC3 Newsletter

Commentary: How Compliance Officers & Firms Can Help Limit CCO Personal Liability This article originally appeared on the Thomson Reuters Regulatory Intelligence subscription service for compliance and risk professionals and is... read more »

Wishing One-and-All a Happy, Healthy and Prosperous New Year

We hope each of you found some peace and tranquility in the company of loved ones this holiday season and want to wish one-and-all a happy, healthy and prosperous New... read more »

Understanding How to Mitigate Liability and Navigate Insurance Options (Part II)

In June, we shared our thoughts around common insurance gaps and insurance riders that CCOs as well as managers should understand. One of the gaps we shared related to pre-claim... read more »

Cybersecurity - What have we learned and what have we done?

Regulatory Landscape In April 2015, the Securities and Exchange Commission ("SEC's") Division of Investment Management issued a guidance update, identifying cybersecurity as a critical issue. Several regulators are in fact focusing... read more »

Gatekeepers in SEC Crosshairs

Ever since the enforcement cases were announced as part of the SEC’s “Operation Broken Gate,” the SEC enforcement division has continued to ramp up scrutiny of gatekeepers including third-party service... read more »

Anna M. Bencrowsky, CRCP, CMFS Joins SEC3

We are pleased to announce that Anna M. Bencrowsky, CRCP, CMFS has joined SEC3 as a Senior Consultant. Prior to joining SEC3, Anna held several executive compliance positions. Anna recently retired... read more »

Events

Upcoming Events - September & October 2017

Upcoming Events Don’t miss the opportunity to meet with us in person to discuss the topics that matter most to you. SEC3 is teaming up with industry experts in NYC to discuss...

May 23, 2017 - Webcast: WannaCry Ransomware: Were You Really Protected or Just L…

When: Tuesday, May 23rd, 2017 | Schedule: 12pm - 1pm EST Who: Paul Caiazzo, CEO and Co-Founder, TruShield Security Solutions Michael Brice, Founder, BW Cyber Services John Lukan, Managing Director, SEC Compliance Consultants, Inc. We...

June 14, 2017 - Compliance Breakfast Briefing

8:30-9:00am - Networking and Continental Breakfast 9:00-10:30am - Program Location: Willkie Farr & Gallagher LLP | 600 Travis Street | Suite 2310 | Houston, TX Barry Barbash from Willkie Farr & Gallagher LLP,...

June 13, 2017 - Compliance Breakfast Briefing

8:30-9:00am - Networking and Continental Breakfast 9:00-10:30am - Program Location: Haynes and Boone, LLP | 2323 Victory Avenue | Suite 700 | Dallas, TX 75219 Validated parking is available in the garage attached...

May 31, 2017 - Chicago

9:00-9:30 a.m - Networking and Continental Breakfast 9:30-11:00 a.m - Program Location: Baker & McKenzie LLP | 300 East Randolph Drive | Suite 5000 | Chicago, IL 60601 Kristin Gonzalez and Jerome Tomas...

May 17, 2017 (NYC WIMF)

This event is by invitation only. Please email info@seccc.com to learn more.

May 15, 2017 (NYC Chief Compliance Officer Roundtable)

9:00-9:30am - Networking and Continental Breakfast 9:30-11:00am - Program Location: Blank Rome LLP | The Chrysler Building | 405 Lexington Avenue | New York, NY 10174 | 22nd Floor Boardroom | Phone:...

Webcast: The Most Insidious Cybersecurity Threat Is Also The Least Understood

When: Tuesday, April 25th | Schedule: 12pm - 1pm EST Who: Paul Caiazzo, CEO and Co-Founder, TruShield Security Solutions Michael Brice, Founder, BW Cyber Services John Lukan, Managing Director, SEC Compliance Consultants, Inc. Ransomware, the...

CCO Liability (Part III): Managing Liability Webinar

In this webinar, panelists discuss indemnifications and insurance as potential remedies to address the direct financial risks to a CCO. Attendees will learn: What terms and conditions should Chief Compliance Officers be...

Webinar: CCO Liability (Part III): Managing Liability: Navigating Indemnities an…

When: Tuesday, February 21, 2017 Schedule: 11:00am ET / 10:00am CT / 9:00am MT / 8:00am PT / 7:00am AT Description of Webinar: The National Society of Compliance Professionals is pleased to host...

Webcast: SEC 2017 Examination Focus Area – Cybersecurity Testing

Penetration Testing & Vulnerability Assessments - Examining the SEC & FINRA Requirements When: Wednesday, January 25th | Schedule: 12pm - 1pm EST Who: Paul Caiazzo, CEO and Co-Founder, TruShield Security Solutions Michael Brice, Founder,...

Chief Compliance Officer Roundtable: Breakfast Briefing

When: October 20, 2016 Where: Blank Rome LLP | The Chrysler Building | 405 Lexington Avenue | New York, NY 10174 | 22nd Floor Boardroom | Phone: 212.885.5000 Thomas Westle and Janaya...

Practicing Law Institute - Hedge Fund Management 2016

When: September 15, 2016 Where: New York & concurrent webcast | 1177 Avenue of the Americas | New York, NY 10036 Schedule: 9:00 am – 5:00 pm Janaya Moscony, President of SEC3 will...

CHIEF COMPLIANCE OFFICER ROUNDTABLE: BREAKFAST BRIEFING

When: April 13, 2016 Where: Blank Rome LLP | The Chrysler Building | 405 Lexington Avenue | New York, NY 10174 22nd Floor Boardroom Thomas Westle and Janaya Moscony, along with industry experts,...

COMPLIANCE SCIENCE SUMMIT 2015

When: November 17, 2015 Where: Convene Midtown East | 730 Third Avenue | New York, NY 10017 Janaya Moscony, President, SEC Compliance Consultants, Inc. will be moderating a...