U.S. Securities and Exchange Commission – Global Investment Law Watch

More Marketing Missteps

Sep 10 2024

By: Pablo Man, Pamela Grossetti, Lance Dial and Jennifer Klass

On 9 September 2024, the Securities and Exchange Commission (SEC) announced settled charges against nine registered investment advisers for violations of Rule 206(4)-1 (the Marketing Rule). Unlike the prior settlements (which focused primarily on the use of hypothetical performance), these settlements focused on other elements of the Marketing Rule: (i) the prohibitions on statements of material fact that are untrue or that the adviser cannot substantiate; (ii) disclosures relating to testimonials and endorsements; and (iii) required disclosures for third-party ratings. Many of these violations were based on website disclosures. In total, nine advisers agreed to pay US$1,240,000 in combined civil penalties, ranging from US$60,000 to US$325,000.

The SEC Narrows the Internet Adviser Exemption

Mar 28 2024

By: Jennifer L. Klass, Matthew J. Rogers, and Bradley D. Bostwick

On 27 March 2024, the US Securities and Exchange Commission (SEC) adopted amendments (the Amendments) to Rule 203A-2(e) under the Investment Advisers Act of 1940, known as the “Internet Adviser Exemption.” The Internet Adviser Exemption allows certain advisers that provide investment advice through an interactive website (Internet Advisers) to register with the SEC, even if they do not have enough assets under management to otherwise qualify for federal registration.

United States: A Record Year: SEC FY 2022 Enforcement Actions Bring Big Penalties

Nov 16 2022

By: Keri E. Riemer, Michael W. McGrath, Neil T. Smith, Hayley Trahan-Liptak, and Christopher F. Warner

On 15 November 2022, the U.S. Securities and Exchange Commission (SEC) announced its enforcement statistics for its 2022 fiscal year (FY 2022), noting that it filed 760 total enforcement actions — a 9% increase over fiscal year 2021. This total was comprised of 462 new actions, 169 “follow-on” actions, and 129 actions for delinquent filings. Money obtained in SEC actions, comprising civil penalties, disgorgement, and pre-judgment interest, totaled a record-breaking $6.439 billion (compared to $3.852 billion in fiscal year 2021). Civil penalties, totaling $4.194 billion, were also the highest on record.

United States: SEC Adopts Expanded Proxy Voting Reporting by Registered Funds and New Reporting of Executive Compensation Votes by Form 13F Filers

Nov 07 2022

By: Lynn A. Schweinfurth, Kathy Kresch Ingber, and Crystal Liu

On November 2, by a vote of 3 to 2, the Securities and Exchange Commission adopted, largely as proposed, amendments to Form N-PX under the Investment Company Act of 1940 and new Rule 14Ad-1 under the Securities Exchange Act of 1934 (Amendments). The Amendments expand the proxy voting information that registered investment companies (Funds) report on Form N-PX, and require, for the first time, Form 13F filers (Managers) to report annually on Form N-PX how they voted proxies concerning certain shareholder advisory votes on executive compensation (“say-on-pay” votes).

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