Investment Advisers Act of 1940

SCG Asset Management Offers the Market’s First Equity-Linked Note Interval Fund

Retrieved on:

Monday, November 6, 2023

Professional Services, Finance, Investment Advisers Act of 1940, Chief analytics officer, FDIC, Security (finance), SCG, Accreditation, Note, Selector, Growth, Risk management, Prospectus, Fund, NAV, SAI, Management, Financial adviser, Bank

SCG Asset Management LLC (“SCG”), a seasoned provider of derivative-based investment solutions, today reintroduced the Alternative Strategies Income Fund (“Fund”), a continuously offered, closed-end interval fund focused on equity linked notes (“Notes”).

Key Points:

SCG Asset Management LLC (“SCG”), a seasoned provider of derivative-based investment solutions, today reintroduced the Alternative Strategies Income Fund (“Fund”), a continuously offered, closed-end interval fund focused on equity linked notes (“Notes”).
Through its proprietary Selector model, SCG designs a high income paying portfolio that is well diversified across timespans, industries, and sectors.
The Fund also seeks to provide low to moderate volatility and low correlation to the broader markets.
Mr. Sachs and SCG’s management team have over 100 years of experience in investing, risk management and investment product development.

Gibson, Dunn & Crutcher LLP Files Opening Brief in Lawsuit Against the SEC to Vacate the Private Fund Adviser Rule

Retrieved on:

Thursday, November 2, 2023

Unlike retail investment products open to all investors, private funds are only available to experienced, sophisticated investors.

Key Points:

Unlike retail investment products open to all investors, private funds are only available to experienced, sophisticated investors.
As the brief explains:
This case concerns “private funds”—pooled investment vehicles that are not offered to the public.
Unlike more familiar pooled investment vehicles, like mutual funds, private funds are generally not accessible to non-professional investors (known as retail customers).
The brief also argues that the SEC did not give adequate reasons for the rule.

SEC Charges BlackRock with Failing to Properly Disclose Investments by Publicly Traded Fund it Advised

Retrieved on:

Tuesday, October 24, 2023

Investment Advisers Act of 1940, Security (finance), BlackRock, BIT, Investment Company Act of 1940, Advertising, Investment, Enforcement, Financial adviser, Cryptocurrency, Aviron

Washington, D.C.--(Newsfile Corp. - October 24, 2023) - The Securities and Exchange Commission today charged BlackRock Advisors, LLC, an investment adviser, for failing to accurately describe investments in the entertainment industry that comprised a significant portion of a publicly traded fund it advised.

Key Points:

Washington, D.C.--(Newsfile Corp. - October 24, 2023) - The Securities and Exchange Commission today charged BlackRock Advisors, LLC, an investment adviser, for failing to accurately describe investments in the entertainment industry that comprised a significant portion of a publicly traded fund it advised.
To settle the charges, BlackRock agreed to pay a $2.5 million penalty.
According to the SEC’s order, in many of BIT’s annual and semi-annual reports that were publicly available to investors and filed with the SEC, BlackRock inaccurately described Aviron as a “Diversified Financial Services” company.
The SEC’s order also finds that BlackRock stated that Aviron paid a higher interest rate than was actually the case.

SEC Obtains Emergency Relief To Halt Nearly $130 Million Fraud Targeting Indian American Community

Retrieved on:

Monday, October 16, 2023

Douglas v. U.S. District Court ex rel Talk America, Investment, Fraud, Complaint, District court, GK, Charles Ponzi, SEC Rule 10b-5, Krishnan, Investment Advisers Act of 1940, Security (finance), Cryptocurrency

Washington, D.C.--(Newsfile Corp. - October 16, 2023) - The Securities and Exchange Commission today announced that it obtained a temporary restraining order, asset freeze, and other emergency relief to halt an ongoing fraud targeting the Indian American community that has raised nearly $130 million since April 2021.

Key Points:

Washington, D.C.--(Newsfile Corp. - October 16, 2023) - The Securities and Exchange Commission today announced that it obtained a temporary restraining order, asset freeze, and other emergency relief to halt an ongoing fraud targeting the Indian American community that has raised nearly $130 million since April 2021.
The SEC’s complaint alleges that the Founders overstated the profitability of the investments and paid investors at least $17.8 million in fake profits that were actually Ponzi payments.
The SEC’s complaint further alleges that defendants misrepresented Krishnan’s expertise and success using his eponymous “GK Strategies” options trading method.
“Through allegedly false promises of unrealistic returns and lies about the success of their investing strategies, the defendants raised nearly $130 million from investors.

SEC Charges 10 Firms with Widespread Recordkeeping Failures

Retrieved on:

Friday, September 29, 2023

Holt, Investment Advisers Act of 1940, Interactive Brokers, Record, TPH, Consultant, Commodity Futures Trading Commission, Chicago Region Environmental and Transportation Efficiency Program, Nuveen, Fifth Third Bank, Robert W. Baird, Security (finance), WBIM, Contract management, Financial adviser

The firms admitted the facts set forth in their respective SEC orders and acknowledged that their conduct violated recordkeeping provisions of the federal securities laws.

Key Points:

The firms admitted the facts set forth in their respective SEC orders and acknowledged that their conduct violated recordkeeping provisions of the federal securities laws.
The firms agreed to pay combined penalties of $79 million as outlined below and have begun implementing improvements to their compliance policies and procedures to address these violations.
“There are real benefits to self-reporting, remediating and cooperating.”
The SEC’s investigations uncovered pervasive and longstanding off-channel communications at all 10 firms.
By failing to maintain and preserve required records, certain of the firms likely deprived the SEC of these off-channel communications in various SEC investigations.

SEC Charges California Advisory Firm AssetMark for Failing to Disclose Multiple Financial Conflicts

Retrieved on:

Tuesday, September 26, 2023

Security (finance), Investment Advisers Act of 1940, Flanders, Division, Financial adviser

According to the SEC’s order, from at least September 2016 to January 2021, AssetMark failed to provide full and fair disclosure of conflicts of interest arising from its affiliate’s cash sweep program, which transferred, or “swept,” clients’ uninvested cash into interest-earning bank accounts.

Key Points:

According to the SEC’s order, from at least September 2016 to January 2021, AssetMark failed to provide full and fair disclosure of conflicts of interest arising from its affiliate’s cash sweep program, which transferred, or “swept,” clients’ uninvested cash into interest-earning bank accounts.
AssetMark did not advise clients that it helped set the fee that its affiliate custodian received for operating the cash sweep program.
“Investment advisers have a fundamental duty to disclose conflicts between their own financial interests and those of their clients,” said Andrew Dean, Co-Chief of the SEC Enforcement Division’s Asset Management Unit.
“Here, AssetMark failed to disclose multiple financial conflicts of interest where AssetMark and its affiliated custodian reaped significant financial benefit from decisions it made.”
The SEC’s order finds that AssetMark violated the antifraud and compliance provisions of the Investment Advisers Act.

SEC Charges Advisory Firm Bruderman Asset Management and its Principal for Failing to Disclose Misuse of Investment Funds

Retrieved on:

Tuesday, September 26, 2023

BAM, Disclosure, Security (finance), Investment Advisers Act of 1940, Failure, Investment, Associate, Financial adviser

According to the SEC’s order, from at least February 2017 through August 2021, BAM and Bruderman advised at least 13 clients to invest at least $6.1 million in three companies in which Bruderman had decision-making authority and significant ownership interests.

Key Points:

According to the SEC’s order, from at least February 2017 through August 2021, BAM and Bruderman advised at least 13 clients to invest at least $6.1 million in three companies in which Bruderman had decision-making authority and significant ownership interests.
According to the SEC’s order, BAM, through Bruderman, also failed to implement reasonably designed written policies and procedures concerning the disclosure of conflicts of interest.
The SEC's investigation was conducted by Megan R. Genet, Bari R. Nadworny, Elizabeth Baier, George O’Kane and Steven G. Rawlings under the supervision of Mr. Pollock.
The SEC examinations that led to the investigation were conducted by Lori Rutkowski, Adam Bacharach, Michael E. Kress Jr. CFA, David Jaffe, Lourdes Caballes, and Michael Rufino.

Schulte Roth & Zabel Continues Expansion of Investment Management Regulatory Capabilities With Addition of Michael Didiuk

Retrieved on:

Monday, September 25, 2023

Schulte Roth & Zabel is proud to announce the addition of Michael Didiuk as a partner in the Investment Management Regulatory & Compliance Group in New York.

Key Points:

Schulte Roth & Zabel is proud to announce the addition of Michael Didiuk as a partner in the Investment Management Regulatory & Compliance Group in New York.
Michael has more than 20 years of experience as an investment management regulatory lawyer, both at leading law firms and the US Securities & Exchange Commission (SEC).
Michael spent more than seven years at the SEC, where he held various roles, including senior counsel in the Office of Chief Counsel for the Division of Investment Management, and investment management counsel to two SEC commissioners.
He is the latest partner addition to Schulte’s market-leading Investment Management Regulatory & Compliance Group, which has been ranked Band 1 in Chambers USA every year since the category was recognized.

Deutsche Bank Subsidiary DWS to Pay $25 Million for Anti-Money Laundering Violations and Misstatements Regarding ESG Investments

Retrieved on:

Monday, September 25, 2023

To settle the charges, DIMA agreed to pay a total of $25 million in penalties.

Key Points:

To settle the charges, DIMA agreed to pay a total of $25 million in penalties.
“Importantly, those AML obligations require mutual funds to establish and implement individualized programs to detect and prevent money laundering and terrorism financing.
In the ESG misstatements action, the SEC’s order finds that DIMA violated Sections 206(2) and 206(4) of the Investment Advisers Act and Rules 206(4)-7 and 206(4)-8 thereunder.
The ESG misstatements investigation was conducted by HelenAnne Listerman and Jessica Neiterman, with assistance from AMU Industry Expert John Farinacci, and supervised by Brianna Ripa, Robert Baker, Mr. Schuster, and Mr. Dean.

SEC Charges Private Equity Fund Adviser American Infrastructure Funds for Breaching Its Duties

Retrieved on:

Friday, September 22, 2023

Acceleration, Investment Advisers Act of 1940, Security (finance), AIM, Enforcement, Division, Financial adviser

Washington, D.C.--(Newsfile Corp. - September 22, 2023) - The Securities and Exchange Commission today announced that American Infrastructure Funds LLC (AIM), a Foster City, California-based registered investment adviser to private funds, agreed to pay more than $1.6 million to settle charges resulting from its acceleration of portfolio company monitoring fees, for transferring a private fund asset from funds nearing the end of their term to a new fund, and for loaning money from one private fund to another private fund advised by an affiliate.

Key Points:

Washington, D.C.--(Newsfile Corp. - September 22, 2023) - The Securities and Exchange Commission today announced that American Infrastructure Funds LLC (AIM), a Foster City, California-based registered investment adviser to private funds, agreed to pay more than $1.6 million to settle charges resulting from its acceleration of portfolio company monitoring fees, for transferring a private fund asset from funds nearing the end of their term to a new fund, and for loaning money from one private fund to another private fund advised by an affiliate.
The SEC’s order also finds that AIM violated its duty of care by failing to consider whether the fee acceleration was in its clients’ best interest.
“Among other breaches, AIM failed to disclose its conflicts of interest when it transferred a client’s asset to a new fund."
The SEC’s order finds that AIM violated antifraud and compliance provisions of the Advisers Act.