Cybersecurity Breaches at Advisers: More Common Than You Think

Think cybersecurity breaches won’t happen to your firm? It may be time to reconsider. Cybersecurity breaches are becoming much more common at investment advisers than firms may realize. While the industry is certainly buzzing about cybersecurity as the latest hot button regulatory and operational risk, executives may nonetheless perceive their firms to be at low risk for a data breach —erroneously assuming that their firms are either too small to be a target, that their IT departments have the latest technology and won’t be hacked, or that their firms are too far removed from maintaining custody of physical funds or securities to have anything of value worth hacking. This false sense of security could prove costly, in terms of both financial costs and reputational harm, as the following actual incidents reveal.

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SEC Retail Investor Focus Turns Towards Registered Investment Companies

Earlier this year when the SEC’s Office of Compliance Inspections and Examinations (“OCIE”) announced its 2018 examination priorities, OCIE stated that a core priority was to protect retail investors, including seniors and individuals saving for retirement. OCIE is now continuing this effort by focusing on mutual funds and exchanged-traded funds (together, the “Funds”) as the … Continued

SEC Alerts Investment Advisers to Review Solicitor Arrangements

On October 31, OCIE issued a new Risk Alert for investment advisers with solicitor arrangements. The SEC periodically releases risk alerts to notify the industry of deficiencies they are finding during examinations, and this latest alert puts investment advisers with solicitor arrangements on notice to check their solicitor agreements, policies and procedures, and disclosure documents. … Continued

Pennsylvania Sounds Warning Bell Over Client Credentials and Custody

The Pennsylvania Department of Banking and Securities (PDOBS) has indicated in recent guidance two concerns related to investment advisers using client credentials to access a custodial account(s). In the letter dated September 25, 2018, PDOBS indicates that the use of client credentials may create custody and is considered to be a dishonest and unethical practice. … Continued

San Diego 2018 Conference Gallery

Ascendant/CSS San Diego Conference Another compliance conference is in the books. We had a great time in San Diego, and we think our attendees did, too. We hope to see you in Miami! (Click on photos to view full size.)  

Advertising Issues: SEC and GIPS Performance in the Private Fund Space

Over a year ago, OCIE released the Risk Alert, “The Most Frequent Advertising Rule Compliance Issues Identified in OCIE Examinations of Investment Advisers.” While the alert highlighted several areas where performance advertising is involved, our recent CSS/Ascendant conference panelists in a session entitled “Best Practices for SEC and GIPS Performance in the Private Fund Space” … Continued

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