The U.S. Attorney’s Office (District of Connecticut) announced that it entered into a plea agreement with an owner/investment adviser representative of an investment adviser firm based in Connecticut. This CT investment adviser representative waived his right to be indicted and pled guilty to defrauding clients of $2.7 million through a cherry-picking scheme. Last month, the U.S. Securities and Exchange Commission (“SEC”) also issued a cease-and-desist order against this investment adviser representative and firm. This blog post will review the cherry-picking allegations and offer several best practices for a chief compliance officer (“CCO”) to detect such activity within his or her own investment adviser firm.
Category Archives: Code of Ethics
New WSP/CoE Section Update – IAR CE
May 19, 2022
RIA Compliance Consultants has released a new WSP/CoE section update, IAR CE. This is a sample investment adviser compliance manual section related to the investment adviser representative continuing education (“IAR CE”) requirements of certain state securities regulators.
RIA Compliance Consultants has recently updated its Sample WSP/CoE Section, IRA Rollover Recommendations.
20% Discount on Self-Customized Written Supervisory Procedures and Code of Ethics Manual
December 28, 2012
RIA Compliance Consultants is offering a 20% discount now until January 04, 2013, on our self-customized written supervisory procedures and code of ethics manual prepared through RIA Express – Compliance Manual Drafter. Please use the code: RIA-Express2012 at checkout to receive this discount.
RIA Compliance Consultants now offers an electronic compliance manual authorizing wizard, RIA Express – Compliance Manual Drafter, to allow your registered investment advisor to create a regulator specific, customized written supervisory procedures and code of ethics manual on your own. Even if your registered investment advisor already has in place a written supervisory procedures and code of ethics manual, our electronic drafter can be a great tool to strengthen your current procedures.
Under Rule 204A-1 (“Code of Ethics Rule”) of the Investment Advisers Act of 1940 (“Investment Advisers Act”), each investment adviser registered with the U.S. Securities and Exchange Commission (“SEC”) is required to adopt and implement a code of ethics that sets forth required standards of conduct for all supervised persons of the registered investment adviser and addresses conflicts that arise from personal trading by advisory personnel. Most state securities regulators have similar requirements.
Complimentary Code of Ethics Acknowledgement Form
April 11, 2012
Receive a complimentary sample Code of Ethics Acknowledgement Form by clicking the “Like” button on our Facebook page.
The Code of Ethics Rule
February 07, 2012
Under Rule 204A-1 (“Code of Ethics Rule”) of the Investment Advisers Act of 1940 (“Investment Advisers Act”), each investment adviser registered with the U.S. Securities and Exchange Commission (“SEC”) is required to adopt and implement a code of ethics that sets forth required standards of conduct for all supervised persons of the registered investment adviser and addresses conflicts that arise from personal trading by advisory personnel. Most state securities regulators have similar requirements.
In August 2004, the U.S. Securities and Exchange Commission (“SEC”) adopted Rule 204A-1 under the Investment Advisers Act of 1940 (“Investment Advisers Act”) that required registered investment advisers to adopt codes of ethics. Under SEC Rule 204A-1, an investment advisory firm must adopt and implement a code of ethics, establishing rules and conduct all supervised persons must adhere to as a fiduciary. SEC Rule 204A-1 was adopted in attempt to create a standard of conduct that would “prevent fraud by reinforcing fiduciary principles that must govern the conduct of advisory firms and their personnel.” Section 206 of the Investment Advisers Act imposes a fiduciary duty on investment advisers by making it unlawful for an investment adviser to engage in fraudulent, deceptive or manipulative conduct. In its role as a fiduciary, an investment adviser has a duty to serve the best interest of its clients; a duty to have a reasonable, independent basis for investment advice; a duty to ensure that its investment advice is suitable to the client’s objectives, needs and circumstances; and a duty to be loyal to client.
Is Your RIA Supervising the Gifts and Political Contributions of Its Investment Adviser Reps – Learn About the SEC’s Proposed Pay-to-Play Rule
October 07, 2009
The U.S. Securities and Exchange Commission (“SEC”) recently proposed new SEC Rule 206(4)-5 under the Investment Advisers Act of 1940. According to the SEC, the proposed rule is intended to curtail “pay to play” practices by registered investment advisers that seek to manage money for state and local governments.
