Investment Advisory

  • Represented four advisors transitioning from a “wirehouse” to an independent registered investment advisor in a breach of contract and fiduciary duty action. We defeated a TRO after a full-day evidentiary hearing following expedited briefing and discovery.
  • Represented a leading international partnership of independent, fiduciary wealth management firms. Conducted due diligence for the client’s acquisition of an RIA with $16.5 billion AUM.
  • Represented an investment advisor in an SEC investigation of conflicts of interest related to the firm’s recommendation of other registered investment advisors in conjunction with certain wrap fee programs.
  • Represented a senior executive of an RIA in an SEC investigation of the firm’s conversion of mutual fund share classes that charged 12b-1 fees in non-qualified advised accounts to share classes that did not charge 12b-1 fees. The matter was closed without any action against the senior executive.
  • Represented advisors in SEC and FINRA investigations of outside business activities which closed without any action against the advisors.
  • Represented team of advisors in successfully limiting the scope of a TRO that was issued ex parte.

Looking Forward

After conducting a series of “Initiatives,” in 2021, the SEC’s Division of Examinations published three separate Risk Alerts focusing on perceived deficiencies involving: 1) Advisers Fee Calculations, 2) Advisers Who Provide Electronic Investment Advice, and 3) Advisers Managing Client Accounts Utilizing Wrap Fee Programs. Given the number of deficiencies found in each Initiative, we expect the SEC to devote additional enforcement resources to pursuing actions in these areas. We anticipate that the SEC will scrutinize the economic relationship between advisers and their clients and disclosures regarding conflicts of interests. We also believe the SEC will focus on sources of revenue that advisers, and their affiliated entities, receive in connection with advised accounts.

Reports suggest that the record setting growth of the investment adviser sector should continue well into 2022. Strong growth both in regulatory assets under management and in client numbers should continue to create opportunities for those seeking to acquire or transition advisory businesses to new platforms.