Articles Tagged with Advisory

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The Securities and Exchange Commission (“SEC”) issued a cease-and-desist order on February 19, 2015 against SEC-registered Logical Wealth Management, Inc. and owner, Daniel J. Gopen, (together, “Respondents”).  The list of violations the SEC found the Respondents committed is extensive and includes improper registration, compliance, and recordkeeping. The SEC found the Respondents exaggerated their assets under management in order to register with the SEC, falsely reported their place of business as Wyoming, a state in which advisers are not regulated, and did not have compliance policies and procedures in place or books and records available to the SEC.  The SEC has ordered the Respondents to cease and desist, revoked Logical Wealth’s registration, barred Mr. Gopen from any advisory activity and imposed a $25,000 civil penalty.

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On February 3, 2015, the Securities and Exchange Commission (“SEC”) released two publications addressing cybersecurity at advisory and brokerage firms. The first publication, a Risk Alert, relays the findings from the examinations of more than 100 investment advisers and broker-dealers and focuses on how they: (i) establish cybersecurity policies, procedures and oversee the processes; (ii) identify cybersecurity risks; (iii) protect information and networks; (iv) identify and address the risks associated with funds transfer requests, remote access to client information and third-party vendors; and (v) detect activity that is unauthorized.  The SEC’s Office of Investor Education and Advocacy released the second publication which provides tips for investors to better safeguard their online investment accounts. Their recommendations include using a strong password and a two-step verification process.

The SEC’s recent examinations found 93% of examined broker-dealers and 83% of examined investment advisers have adopted cybersecurity policies, though, whereas 89% of the broker-dealers periodically audit compliance with the policies, only 57% of investment advisers conduct periodic cybersecurity compliance audits.  The SEC continues to place high importance on cybersecurity and every broker-dealer and investment adviser should ensure they have adequate written policies and procedures in place and test them periodically.

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Contributed by: The Family Office Association

The Family Office Association is pleased to contribute its latest Q&A “white paper” regarding family enterprise governance to the Investment Funds Law Blog.  The Q&A has contributions from James Grubman, Ph.D. and Dennis Jaffe, Ph.D., two of the world’s leaders on the topic of family enterprise governance.  Among other things, the Q&A discusses implementing mechanisms for inclusive decision-making, formulating a family governance plan, including non-blood line family members into the governance process and incorporating a family council.  Read more from the Family Office Association Q&A white paper.