Securities Compliance Sentinel blog

The highly regulated securities and financial industry has a host of complex problems—and financial institutions often find themselves on the receiving end of audits, investigations and other compliance issues.

In the Securities Compliance Sentinel blog, Ernest shares his knowledge and experience to address cutting edge issues in the firm’s Securities Compliance Sentinel Blog. Join this team of bloggers in their exploration of this increasingly complex area.

Scroll down to see Ernest's most recent blog posts.

Recent Blog Posts

  • Why is Anyone Surprised with the SEC Examining Firms with Previously Disciplined Advisors? On Monday, September 12, 2016, the SEC’s Office of Compliance Inspections and Examinations (“OCIE”) announced that a “Supervision Initiative” will take place across the country. OCIE staff will conduct focused RIA examinations of firms employing or contracting with supervised persons, who have a disciplinary history.  OCIE plans to evaluate the effectiveness of RIA compliance programs, supervisory oversight practices, and disclosures to clients and prospective clients, concentrating on the potential risk disclosures arising from financial arrangements initiated by supervised persons with a disciplinary history.  OCIE’s justification for this targeted examination... More
  • Fox Rothschild’s National Survey on Restrictive Covenants Released Although the Broker Protocol has alleviated some concerns, many firms still find themselves wrestling with the vagaries of restrictive covenants when dealing with their employees.  Fox Rothschild has produced this revised and updated 50-state survey as a quick reference for in-house counsel and human resource professionals to access details on the variations by state in the laws of restrictive covenants in the employment context. As always, we are available to discuss individual circumstances.... More
  • The More Things Change, The More They Stay The Same…. Given the start of the NFL season and the post-Labor Day last leg of the presidential campaign season, it reminded me of a blog entry that I posted in August 2012, regarding picking a winner for the then presidential race based upon the conference of the team that won the Super Bowl in the year of the election.  I have re-published the blog below for your amusement. I blogged on this topic because it involved 3 things everyone in the securities... More
  • Huge Customer Protection Rule Fine Brings Back Memories My friend and a legend in the securities regulatory field, Edwin Nordlinger, who served as Deputy Regional Director in the SEC’s New York office for years, was one of the nation’s premier experts on the SEC’s net capital and customer protection rules.  He taught hundreds of SEC staff members and others about these rules over the years.  However, when Ed would begin one of these lectures, he would always introduce himself by saying: “Hello, I am Ed Nordlinger from New... More
  • Enforcement Settlements All Wrapped Up in a Bow Last year, the SEC’s Division of Enforcement launched the “Municipalities Continuing Disclosure Initiative” offering “favorable settlement terms” to municipal issuers and underwriters who self-report continuing disclosure violations.  At that time, it was claimed that there were a lot of problems and that it was expected there would be more such settlements in the future.  See Despite the fanfare, the SEC has used pre-packaged settlements in the past, and will most likely continue to do so.  Thus, not really, a year... More
  • Fox’s Frank Razzano Publishes New Securities Article in Securities Regulation Law Journal Our partner, Frank C. Razzano, has recently published an article, entitled “What Lies Ahead: Halliburton v. Erica P. John Fund, Inc.,” in the Securities Regulation Law Journal (Spring 2015).  It is a great article discussing a recent United Supreme Court decision dealing with class actions.  Kindly let us know if you would like a copy for your review.   ... More
  • Josh Horn’s Great Guidance on RIA Conflicts of Interest We are pleased to share with everyone Josh Horn’s excellent guidance on RIA conflicts of interest, recently, published in the Practical Compliance and Risk Management for the Securities Industry, a professional journal published by Wolters Kluwer Financial Services, Inc.  See PCRM_01-15_Horn-Shah-C3.... More
  • Is the SEC that good? SEC Wins Every Administrative Case In what is sure to add more “fuel to the fire,” it was recently reported that the SEC has won every case brought in its administrative courts over the last year.  The SEC has not been so successful with its federal court cases, winning 61% of those cases over that same period. Of course, regular blog readers know that the Dodd-Frank Act expanded the SEC’s powers to permit it to bring more cases in its administrative courts.  These SEC proceedings restrict discovery, testimony and evidence while... More
  • INDIVIDUAL MAY ACT AS SOLICITOR DESPITE SEC ADMINISTRATIVE ORDER The SEC Division of Investment Management determined that a solictor may receive a fee for the soliciation of clients for registered investment advisers notwithstanding a Commission administrative order against her.  See Matter of Stephanie Hibler, In deciding to allow the solicitor to receive cash solicitation fees, the SEC staff noted in its response letter that the Commission vacated the portion of the order barring her from being associated with an investment adviser.  The staff also noted that she will conduct... More
  • What are Knowledgeable Employees? The SEC’s Division of Investment Management issued updated guidance regarding the definition of “knowledgeable employees” under Rule 3c-5 of the Investment Company Act of 1940.  See Managed Funds Ass’n, SEC No-Action Letter, avail. 2/6/14, The SEC staff explained that “private funds” include private equity funds, hedge funds, and other pooled investment vehicles, excluded from the definition of an “investment company.”  Investment Company Act Rule 3c-5 permits a knowledgeable employee of a private fund – “covered fund”- or a knowledgeable employee... More