Category: Compliance Programs

Congress Disapproving The SEC Rule That Congress Made The SEC Make

Dodd-Frank made the Securities and Exchange Commission create a rule on the disclosure of payments by resource extraction issuers. The SEC finally got the rule out this fall. Now Congress is threatening to abolish the rule. Section 1504 of the Dodd-Frank Act directed the Securities and Exchange Commission to “issue final rules that require each

The Trump Organization’s Compliance Program Begins

Last week, the Trump Organization kicked off its compliance program by making two appointments. Bobby Burchfield will be independent ethics adviser. He’ll be responsible for signing off on transactions that could raise ethics or conflicts of interest concerns. George Sorial will become chief compliance counsel. In the January 11 press conference, Sheri Dillon announced: [T]o

Affiliated Service Providers and Private Equity

Conflict disclosure and management of the conflicts are central to the Investment Advisers Act. Clients are supposed to come first. That means that conflicts must be disclosed and steps taken to manage the conflict must be put in place. An affiliated service provider is a common conflict. Centre Partners Management used a service provider for

CCO Liability for False Statements on Form ADV

Susan Diamond was Chief Compliance Officer of Saddle River Advisors. Now, Ms. Diamond is out of pocket for a $15,000 penalty and is subject to a nine-month suspension from being associated with any investment adviser or other financial services firms. After the suspension, she will be prohibited from acting in the securities industry in certain managerial

The SEC Really Means It About Pretaliation Severance Agreements

In case you were not clear that the Securities and Exchange Commission is serious about enforcing Rule 21F-17, BlackRock is the latest to run the perp walk. The SEC accused the money management giant of improperly using separation agreements that forced employees to waive their ability to obtain whistleblower awards. The SEC adopted Rule 21F-17, which provides in

A New Level of Compliance Officer Concern: Getting Arrested

Oliver Schmidt is the former top emissions compliance manager for Volkswagen in the United States. The FBI arrested him on Saturday as part of the Volkswagen emissions scandal. He was denied bail, pending a court appearance later this week. Perhaps, the case is not one of a compliance officer missing a problem, but a compliance

Draining the Swamp?

One of the rallying cries for President-elect Trump was to drain the swamp of corruption. Compliance professionals could think of many things that could happen to remove conflicts or the appearance of conflicts. Personally, as a compliance professional and a voter, I was disappointed to learn that Hillary Clinton did a poor job of walling

Return of the Whistleblower

It’s been a busy week for whistleblower cases. The latest is a case against SandRidge Energy for using severance agreements that impeded employees from contacting the Securities and Exchange Commission. In response to Dodd-Frank, the SEC adopted Rule 21F-17 in August 2011, which provides: (a) No person may take any action to impede an individual

Co-investments and Conflicts

I have seen a few indications from the Securities and Exchange Commission showing that examiners are concerned about co-investments. I have yet to see a large over-arching activity in the industry that has been identified as problematic. I saw an action last week for a fund advisor related to co-investments so it caught my eye. Upon