FINRA’s Targeted Examination Letter on Social Media Use

June 2013,  has seen FINRA publish another targeted examination letter — this time aimed at members and associated persons use of social media.  FINRA uses these letters, primarily, to educate member firms about how it uses targeted exams, known as sweeps, to gather insights on member regulatory responses on emerging issues, and carry out investigations. Relying … Read more

Can a sub-adviser or unaffiliated adviser, selected by an investment adviser to help manage client assets, deliver its Form ADV Part 2 to the adviser, instead of the client? Yes, they can, according to a recently issued SEC no-action letter  to Goldman, Sachs & Co. Generally, under Rule 204-3 of the Advisers Act, the “Brochure Rule,” an investment adviser must deliver … Read more

Reporting on Mary Jo White’s speech at a Wall Street CFO Network function, the Washington Post notes her comments about the long-simmering topic of failure of securities law violators to admit guilt when they settle with the SEC.  As a matter of practice, the SEC has routinely allowed defendants to settle cases “without admitting or denying wrongdoing.”  In light of … Read more

Deadline: Financial Statement Distribution for Funds of Hedge Funds

Advisers to funds of funds who maintain custody of clients funds as defined in Investment Advisers Act Rule 206(4)-2, and whose fiscal year ends December 31,  have a deadline looming.   The deadline is June 30 (180 days of the end of their fiscal year) for distributing to fund investors audited financial statement prepared in accordance with GAAP to fund investors  is approaching. … Read more

Effective July 1, 2013, add to the types of  individuals who are no longer eligible to serve as public arbitrators in FINRA arbitrations persons associated with, or registered through, a mutual fund or hedge fund. The list has been growing and already includes  (i) attorneys and accountants who derive a certain percentage or a certain amount of their income from the securities industry, … Read more