2018 SEC enforcement actions reinforce the importance of effective supervision, policies, and procedures for broker-dealers and investment advisers

Abstract

Purpose

To provide analysis on several SEC enforcement actions of interest to broker-dealers and investment advisers.

Design/methodology/approach

The article is organized chronologically based on the dates of the SEC enforcement actions discussed.

Findings

The SEC enforcement actions discussed in the article demonstrate that broker-dealers and investment advisers must maintain and enforce compliance and supervision policies and procedures reasonably designed to detect and prevent violations of the securities laws. When firm personnel commit violations (either intentionally or inadvertently), the SEC will evaluate whether firms could have been more effective in detecting and preventing those violations.Some of these cases also serve to remind firms that the SEC will often take enforcement action even when there is no evidence of customer harm.

Originality/value

Practical guidance from experienced securities lawyers that consolidates and analyzes several recent SEC enforcement actions.

Citation

Koch, A., Ryan, R.G. and Bennett, L.K. (2019), "2018 SEC enforcement actions reinforce the importance of effective supervision, policies, and procedures for broker-dealers and investment advisers", Journal of Investment Compliance, Vol. 20 No. 2, pp. 20-23. https://doi.org/10.1108/JOIC-02-2019-0014