In its 2023 fiscal year that ended on September 30, the U.S. Securities and Exchange Commission (SEC or Commission) brought over 150 enforcement actions against investment advisers and their representatives. A review of notable actions under the Investment Advisers Act of 1940 reveals a number of trends likely to continue into FY2024, including aggressive enforcement in areas of focus for Chairman Gary Gensler’s regulatory agenda.
Here, we provide an overview of key areas of focus and notable actions. These areas of ongoing focus include the following topics:
- Specific rule enforcement, including
- sweeps related to the amended marketing, recordkeeping (off-channel communications), and custody rules
- liquidity rule
- whistleblower protection rule
- Duty of care/best interest
- Conflict of interest–related practices and disclosures, including
- trade allocation
- revenue sharing
- fees and expenses
- Compliance failures
- Environmental, social, and governance (ESG)
- Other material misstatements and omissions (e.g., special purpose acquisition companies (SPACs), crypto asset investing, and retail investors)
- Unregistered activity
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