Compliance Bricks and Mortar for September 22

These are some of the compliance-related stories that recently caught my attention. Other People’s Money: SEC Disgorgement After Kokesh by Daniel R. Walfish in NYU’s Compliance & Enforcement  Kokesh held that the disgorgement remedy in SEC enforcement actions is a “penalty” for purposes of the five-year limitations period for the “enforcement of any civil fine, penalty, or forfeiture.” 28

When You Look And Find That You Are The Problem

Cybersecurity is hard. It’s nearly impossible to stop an attack. If someone really wants in, they can continue to attack and attack until they find a gap. It’s hard to know that you have been breached until well after the breach. It may be just as hard to figure out what was accessed and what

The One With the Scalping

An investment adviser should not buy positions on their own behalf shortly before recommending that position to its clients. Nor should the adviser make recommendations to buy when the adviser is selling in the adviser’s personal accounts. Mark A. Gomes was doing just that. The test case came against Capital Gains Research Bureau. The firm

Most Frequent Advertising Rule Compliance Issues

It looks like the Securities and Exchange Commission has been taking a close look at advertising by investment advisers. The Office of Compliance Inspections and Examinations issued a risk alert on The Most Frequent Advertising Rule Compliance Issues Identified in OCIE Examinations of Investment Advisers. I didn’t see any surprises in the alert. Advisers presented performance results without

Another One with Improper Fees Charged to a Private Fund

For years, the Securities and Exchange Commission has been focused on fees and expenses allocated by a private fund managers to their sponsored funds. The latest to be caught improperly allocating fees and expenses is Potomac Asset Management. First, Potomac improperly charged $2.2 million in fees to the fund for services provided by Potomac to

Blockchain for Corporate Records

Jamie Dimon, chief executive of JPMorgan Chase & Co, speaking at a bank investor conference said Bitcoin “is a fraud” and will blow up. Further, that if any JPMorgan traders were trading the crypto-currency, “I would fire them in a second, for two reasons: It is against our rules and they are stupid, and both

Compliance Bricks and Mortar for September 8

These are some of the compliance-related stories that recently caught my attention. Three Equifax Managers Sold Stock Before Cyber Hack Was Revealed by Anders Melin Three Equifax Inc. senior executives sold shares worth almost $1.8 million in the days after the company discovered a security breach that may have compromised information on about 143 million

Can Concert Tickets Be Securities?

WFAN morning show co-host Craig Carton was arrested for scamming investors out of $5.6 million. His ploy was a fraudulent ticket resale business. He promised the ability to deliver face-value tickets to concerts by Katy Perry, Justin Bieber, Metallica and Barbra Streisand. According to the Securities and Exchange Commission, he used the investors’ money to

Follow Up on the Osunkwo CCO Liability

I was quite bothered by the Osunkwo CCO liability case that, on its face, sanctioned a CCO for misstating a firm’s assets under management. A few years ago, the SEC had expressed an unwillingness to prosecute CCOs, except in three extreme circumstances: Participating in the wrongdoing Hindering the SEC examination or investigation Wholesale failure None of