News

December 20, 2016 News

CLIENT ALERT: SEC Takes Strict Stance on Conflict of Interest Disclosure

December 20, 2016 – Expanding its developing trend towards applying strict statutory construction when helpful to find sanctionable activities against investment advisers, a divided SEC imposed substantial penalties recently against the heads of a small advisory firm for failing adequately to disclose that an economic arrangement with its custodian raised conflicts of interest. The attached Client Alert reviews the SEC’s 2-1 decision in Matter of The Robare Group, Ltd. that overturned the decision of an administrative law judge absolving the advisor of liability, and the unknown long-term viability of the decision based on the possible future composition of the Commission.