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Communiques

The latest compliance news from SEC3 and CCO3.

Latest cease and desist order - Northern Lights and Gemini

May 09, 2013

The Securities and Exchange Commission (“SEC”) issued a cease-and-desist order against Northern Lights Compliance Services, LLC (“Northern Lights”), Gemini Fund Services, LLC (“Gemini”) and the trustees of two investment companies (“Funds”) for which Northern Lights and Gemini were service providers for “disclosure, reporting, recordkeeping and compliance violations”.

Northern Lights, a compliance firm which provided outsourced chief compliance officer services to the Funds, and Gemini, the Funds’ administrator, were each fined $50,000 for failure to perform their respective functions appropriately.

Read more: Latest cease and desist order - Northern Lights and Gemini

 

First Filing of Form NFA-PQR for CPOs and Form NFA-PR for CTAs

April 29, 2013

Quarterly Form NFA-PQR for registered CPOs

The first Form NFA-PQR for newly-registered CPOs whose registration became effective on January 1, 2013 is due sixty days from calendar-quarter end, i.e. by May 31, 2013 for the quarter ended March 31, 2013. Form NFA-PQR is filed every quarter by all registered CPOs. The NFA Form PRQ is distinct from the CFTC Form CPO-PQR which must be filed on a quarterly or annual basis depending on the assets under management (“AUM”) of the firm.

Read more: First Filing of Form NFA-PQR for CPOs and Form NFA-PR for CTAs

 

Mutual Funds - New SEC Sweep Exams and More

March 15, 2013

We have heard so much about the SEC's focus on private fund managers, but now attention is turning to include registered funds as well. OCIE Deputy Director Drew Bowden has warned the industry to expect upcoming sweeps. Areas of anticipated focus include 12b-1 fees and alternative investment companies.

Read more: Mutual Funds - New SEC Sweep Exams and More

 

Update: Marc Gabelli and Bruce Alpert vs SEC

March 11, 2013

On February 27, 2013, Chief Justice Roberts delivered the opinion of a unanimous U.S. Supreme Court in Gabelli, et al vs. U.S. Securities and Exchange Commission ("SEC"), ruling against the SEC. The Supreme Court, petitioned by Marc Gabelli and Bruce Alpert (the "petitioners"), reversed a decision of the US Court of Appeals for the Second Circuit which had affirmed the SEC's right to bring an enforcement action more than five years after the fraudulent conduct occurred.

Read more: Update: Marc Gabelli and Bruce Alpert vs SEC

 

SEC Announces 2013 Examination Priorities

February 26, 2013

On February 21, 2013, the SEC announced its 2013 exam priorities. The SEC outlined its market-wide priorities followed by priorities in four distinct examination programs:

  1. Investment Advisers and Investment Companies
  2. Broker-Dealers
  3. Clearing and Transfer Agents
  4. Market Oversight

In each of the above programs, the SEC will examine (a) ongoing risks (b) new and emerging risks and (c) policy issues.

Read more: SEC Announces 2013 Examination Priorities

 

Filing Dates for Form CPO-PQR and Guidelines for Calculating Assets under Management

February 14, 2013

Many Commodity Pool Operators (CPOs) are currently in the process of preparing to file the new Form CPO-PQR, which is required by the Commodity Futures Trading Commission (CFTC). Form CPO-PQR is filed with the National Futures Association (NFA). The frequency and extent of reporting on Form CPO-PQR depends on the assets under management (AUM) of a CPO.

Read more: Filing Dates for Form CPO-PQR and Guidelines for Calculating Assets under Management

 

Reminder: CFTC Annual Affirmation of Exemptions

February 05, 2013

All commodity pool operators (“CPOs”) and commodity trading advisers (“CTAs”) that claimed an exemption last year must re-affirm their exemptions within 60 days from calendar year-end. Firms that claimed exemptions from CPO registration under CFTC Rule 4.5 or CTFC Rule 4.13(a)(3) (the “deminimis exemption”), or Rules 4.13(a)(1), 4.13(a)(2), 4.13(a)(5) as well as firms that claimed an exemption from CTA registration pursuant to CFTC Rule 4.14(a)(8) must re-affirm those exemptions by March 1, 2013 or those exemptions will be automatically withdrawn.

The NFA’s guidance can be found here .

 

Mutual Fund Securities Lending Programs - Who earns the Revenue?

February 05, 2013

Bloomberg News and Reuters reported on Sunday, February 3 about a lawsuit filed by two U.S. pension funds on January 18, 2013 against an ETF Manager alleging that the manager had “looted” securities-lending revenues from ETF investors and breached its fiduciary duties.

Read more: Mutual Fund Securities Lending Programs - Who earns the Revenue?

 

US Supreme Court - Marc Gabelli and Bruce Alpert vs SEC

January 25, 2013

In a rare acceptance of a case collaterally involving the U.S. Securities Laws, the U.S. Supreme Court accepted an appeal by Marc Gabelli and Bruce Alpert (the “petitioners’) from a U.S. Court of Appeals’ decision that reversed the U.S. District Court. The case stems from a 2008 case brought by the SEC against the petitioners for allegedly allowing a market timer to time one of their funds to the exclusion of any other market timers.

Read more: US Supreme Court - Marc Gabelli and Bruce Alpert vs SEC

 

SEC Enforcement Focus Areas for Private Equity Fund Managers

January 25, 2013

In a speech before the Private Equity International Conference yesterday, Bruce Karpati, the chief of the Asset Management Unit of the SEC Enforcement Division reiterated the focus of the Division on private equity and other fund managers. This speech is a sequel to the one delivered by Mr. Karpati last month before the Regulatory Compliance Association which we discussed in our previous communiqué. After reiterating the Division’s increased attention on fund managers and the fact that Enforcement Staff is participating in exams along with OCIE, Mr. Karpati explained the unique characteristics of private equity funds that make them more susceptible to fraud.

Read more: SEC Enforcement Focus Areas for Private Equity Fund Managers

 

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Events

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When: September 26, 2018 (8:30 am - 6 pm Where: Dorsey & Whitney LLP | 51 W. 52nd Street | New York, NY 10019 Directions > SEC3’s President, Janaya Moscony will join...

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When: June 14, 2018 Where: Blank Rome LLP | The Chrysler Building | 405 Lexington Avenue | New York, NY 10174 | 22nd Floor Boardroom | Phone: 212.885.5000 Schedule: 9:00-9:30am - Networking...

Webinar: 2018 SEC Exam Priorities & Recent Exam Highlights

Don’t miss the opportunity to meet with us in person to discuss the topics that matter most to you. Tobin S. Cochran, Managing Member/President of Focus 1 Associates, LLC and...

Chief Compliance Officer Roundtable: Breakfast Briefing - February 7, 2018

When: February 7, 2018 Where: Blank Rome LLP | The Chrysler Building | 405 Lexington Avenue | New York, NY 10174 | 22nd Floor Boardroom | Phone: 212.885.5000 Schedule: 9:00-9:30am - Networking...

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:...

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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...

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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

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