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The purpose of this paper is to introduce the concept of professionalism into the current discussion of the proper scope of regulation of investment advisers.

The authors reviewed the scholarly literature on what constitutes a profession, the debates over the two bills introduced in Congress in 2012 concerning investment adviser regulation, and some of the studies that led up to those bills.

The authors concluded that professionalism could apply to some investment advisers, particularly financial planners, and that the development of such a profession should be encouraged. However, they found that such a profession would threaten the economic interests of broker‐dealers and their registered representatives, whose routine use of such titles as “financial advisor” or “investment consultant” has led to consumer confusion over the different roles of brokers and advisers. Therefore broker‐dealer interests favor more intense regulation of investment advisers by an SRO such as FINRA, presuming that would impair the development of a true profession of investment advisers.

This paper aims to ensure that the development of a true profession of investment advisers and/or financial planners is openly and fully debated if and when consideration of investment adviser regulation is reintroduced.

The role that professionalism can and should play in investment adviser regulation has not been previously discussed, even though broker‐dealer registered representatives routinely use confusingly professional‐sounding titles to compete against independent investment advisers.

The aim of this article is to provide a description of the rule proposals and other events that preceded the SEC's adoption of the 2005 Final Rule, a summary of the terms of the 2005 Final Rule, and a brief update regarding the status of the 2005 Final Rule.

Describes the SEC's 1999 proposed rule, “Certain Broker Dealers Deemed Not to Be Investment Advisers,” questions that led to that proposed rule, commentary on that proposed rule regarding advisory activities for which broker‐dealers receive special compensation, commentary regarding differences between the regulation of broker‐dealers and the regulation of investment advisers, commentary regarding investors' understanding of the differences between broker‐dealers and investment advisers, the five‐year period without a formal rule, the 2005 Proposed Rule, the 2005 Final Rule, and concerns that remain after issuance of the 2005 Final Rule.

The Chairman of the SEC directed the SEC staff to investigate and report within 90 days on ways in which the policy issues raised by the 2005 Final Rule could be addressed. In addition to the investigation of issues raised by the 2005 Final Rule by the SEC staff, and although the 2005 Final Rule was adopted, to some extent, in response to the lawsuit filed against the SEC by the Financial Planning Association (the “FPA”) in July 2004, the FPA filed a new lawsuit against the SEC on April 28, 2005.

A useful summary of the background and remaining issues related to the SEC's 2005 Final Rule on application of the Adviser's Act to broker‐dealers offering certain non‐traditional brokerage programs.

The Securities and Exchange Commission (SEC) has defined “soft dollar” practices as arrangements under which products or services, other than execution of securities transactions, are obtained by an investment adviser from or through a broker‐dealer in exchange for the direction by the adviser of client brokerage transactions to the broker‐dealer. In the wake of the mutual fund scandals of 2003, soft dollar practices have come under increased scrutiny by the SEC, the U.S. Congress, and others. This article is based on testimony presented by the Investment Counsel Association of America (ICAA) to the U.S. Senate Committee on Banking, Housing, and Urban Affairs at a hearing on soft dollars held on March 31, 2004. The article outlines the following positions: (1) the SEC should ensure that there is adequate disclosure about soft dollar practices, combined with appropriate inspection and enforcement of regulations governing such practices; (2) the consequences of abolishing soft dollars ‐ an outcome that would require Congressional action ‐ most likely would affect smaller investment advisory firms adversely, create entry barriers for new investment advisory firms, and diminish the quality and availability of proprietary and third‐party research; (3) investment advisers should be required to keep appropriate records relating to soft dollar arrangements and to develop and implement internal controls and procedures designed to ensure that soft dollar arrangements are supervised, controlled, and monitored; and (4) eliminating the use of soft dollars for third‐party research would harm investors, diminish the availability of quality research, provide a regulatory‐driven advantage for full‐service brokerage firms, disadvantage third‐party research providers, and result in less transparency to investors, regulators, and market participants.

Explains the US Department of Labor’s newly proposed “Conflicts of Interest” rule and provides a critical analysis of its impact should it be adopted as proposed.

Explains the DOL’s proposed Conflict of Interest rule and discusses how it changes the current fiduciary standards of care under ERISA. The article then probes more deeply into the practical matters involved in implementing the rule, and into the realities of how it would impact fiduciary standards generally, investors, the financial services industry and securities arbitrations. Reactions to the proposed rule are then explained against the backdrop of the practical implications thereof.

This article concludes that the DOL’s proposed Conflict of Interest rule, albeit well-intended, is not reasonably designed to achieve its stated goal and would instead likely harm those whom it purports to help. Ironically, it also potentially waters down the existing high standards of current fiduciaries. The article supports the DOL’s goal of greater responsibility for financial service professionals and proffers an alternative solution that could achieve the desired result more effectively.

This article offers valuable insight on the realities of the proposed law and practical guidance on its implications to the investing public, the financial services industry and securities attorneys.

During 2003, compensation practices for the retail sale of mutual funds came under fire. Recent revelations about failures in the processing of mutual fund breakpoints had triggered a more in‐depth investigation into mutual fund marketing and compensation practice by securities regulators, Congress, and the states. This article focuses on the regulation of sales compensation practices primarily as it affects a broker‐dealer selling mutual funds in the retail market. It addresses the regulatory framework for three key compensation practices: (1) the use of non‐cash compensation in connection with mutual fund sales; (2) marketing and compensation arrangements providing enhanced compensation to a selling firm as well as to its sales representatives for the promotion of certain fund securities over others, such as proprietary funds over non‐proprietary funds, preferred funds over non‐preferred funds, and Class B shares over Class A shares; and (3) the use of commissions for mutual fund portfolio trades as an additional source of selling compensation for selling firms, a practice sometimes referred to as ”directed brokerage.“

The purpose of this study is to elaborate on how schemers build and maintain trust essential for financial fraud that persists over many years. A Ponzi scheme is a form of financial fraud that involves repeated interaction with an increasingly large number of individuals over a long period time. This type of fraud involves the building and maintenance of each individual’s trust. All Ponzi schemes come to a dramatic conclusion. Either the schemer defaults on payments, or someone gets suspicious and the scheme is uncovered. Understanding how schemers build and maintain trust may help prevent or uncover the fraud earlier, limiting financial devastation endured by unsuspecting investors, as well as externalities inflicted on the financial system as investors lose trust.

This study combines an understanding of trust accumulation from multiple disciplines in the existing literature to build a comprehensive model of trust creation and maintenance in Ponzi schemes.

This study finds that key characteristics of both the trustor and trustee contribute to long term financial arrangements. Schemers prey on individuals with specific characteristics that indicate they are more trusting. Trusting individuals are less likely to conduct due diligence to detect fraud. Prevention and detection of fraud are made more difficult by convincing, yet false, mimicry used by schemers to signal trustworthiness.

Bringing together multiple views on trust allows creation of a comprehensive model of trust that captures key characteristics of unsuspecting investors and schemers who prey on them in financial fraud.

To provide a summary and analysis of the Proposed Rulemaking published by the Financial Crimes Enforcement Network (FinCEN) on September 1, 2015, which proposes to subject investment advisers to certain requirements of the Bank Secrecy Act of 1970.

The article discusses the proposed expansion of Bank Secrecy Act regulations to include investment advisers, including the history behind the rulemaking, proposed definition of “investment adviser” under the Act, the comments received in response to the proposed rulemaking, and the potential implications of the rule, should it be finalized.

This article concludes that FinCEN, in cooperation with the Securities and Exchange Commission (SEC) and other agencies, is nearing completion of the proposed rule. Investment advisers that fall under the proposed definition of those subject to Bank Secrecy Act should prepare to implement anti-money laundering compliance programs.

This article contains valuable information about proposed regulations impacting investment advisers registered or required to be registered with the Securities and Exchange Commission.

In the wake of the Securities and Exchange Commission’s (the “SEC”) adoption of new rule 203(b)(3)‐2 under the Investment Advisers Act of 1940, as amended (the “Advisers Act”), many investment advisers that provide advisory services to hedge funds, and that previously had benefited from an exemption from federal registration under the Advisers Act, now will find that they are no longer eligible for such exemption. They will have to become federally registered investment advisers. As a result, such advisers will find themselves subject to a variety of rules and regulations regarding various compliance matters. Significantly, for the first time these advisers also may be able to market their services