Filing Problems Often Trip Up Advisers: SEC Examiners

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By Andrew Ramonas

The Securities and Exchange Commission examinations staff often sees filing problems, poor record-keeping and other compliance issues at investment advisory firms, according to a Feb. 7 agency “ Risk Alert.”

Some of the firms where problems were noted took remedial action, the National Exam Program alert said. Others were referred to the Enforcement Division for possible enforcement action.

Investment advisers should review their practices and procedures in light of its findings, the Office of Compliance Inspections and Examinations said.

Typical Problems

Compliance problems cited most frequently in OCIE deficiency letters include:

  •   failure to have written policies and procedures to prevent regulatory violations. Firms with problems in this area often had out-of-date compliance manuals, according to OCIE staff.
  •  inaccurate and untimely disclosures by advisers. The problems often pertained to Form ADV, PF and D filings.
  •  the inability to give examiners a complete list of client accounts and to realize they had access to some of their clients’ accounts.
  •  failure of employees with nonpublic information on clients’ securities transactions to make adequate or regular reports on their personal securities holdings and transactions.
  •  inaccurate accounting and other business records. OCIE staff said they frequently found contradictory information and out-of-date information.

To contact the reporter on this story: Andrew Ramonas in Washington at

To contact the editors responsible for this story: Phyllis Diamond at; Seth Stern at

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