Author: Thomas Kellerman

AI Transcripts in Investment Advisory There has been a boom recently regarding investment advisers’ use of artificial intelligence (“AI”) to transcribe client and internal meetings. Among other applications, AI features such as Zoom AI Companion, Microsoft Copilot, Jump, and Otter.ai (collectively, “AI Meeting Assistants”) can assist with drafting, transcribing, summarizing… Continue reading →

On May 16, 2024, the Securities and Exchange Commission adopted amendments to Regulation S-P, the regulation that governs the treatment of nonpublic personal information about consumers by certain financial institutions. The amendments apply to broker-dealers, investment companies, and registered investment advisers (collectively, “covered institutions”) and are designed to modernize and… Continue reading →

The Department of Labor (“DOL”) continues to require the completion of a Retrospective Review. The Retrospective Review (the “Review”) requirement of Prohibited Transaction Exemption 2020-02 (the “PTE”) is designed to assist in detecting and preventing violations of, and achieving compliance with, the Impartial Conduct Standards and the policies and procedures… Continue reading →

On April 23, 2024, the U.S. Department of Labor (the “DOL”) promulgated a final rule, titled the “Retirement Security Rule” (the “Final Rule”), updating the definition of an “investment advice fiduciary” under the Employee Retirement Income Security Act of 1974, as amended (“ERISA”). In addition, the DOL issued final amendments… Continue reading →

Background On March 27, 2024, the Securities and Exchange Commission adopted amendments to modernize the rule for internet investment advisers relying on the exemption that qualifies them for SEC registration as smaller investment advisers. Investment advisers generally need to meet the assets under management threshold, advise a registered investment company,… Continue reading →

On April 3, 2024, the Securities and Exchange Commission announced charges against a registered investment adviser for recordkeeping failures regarding personal device communications and pre-clearance of securities transactions in employees’ personal accounts. The firm was charged and agreed to pay a $6.5 million dollar penalty and to implement improvements to… Continue reading →

Background On March 18, 2024, the Securities and Exchange Commission announced settled charges against two SEC registered investment advisers for making false and misleading statements about their purported use of artificial intelligence (“AI”). The firms agreed to settle the SEC’s charges and pay $400,000 in total civil penalties. Cause of… Continue reading →

On February 13, 2024, the U.S. Department of Treasury’s Financial Crimes Enforcement Network (FinCEN) proposed a rule to combat criminals and foreign adversaries from exploiting the U.S. financial system through investment advisers (the “FinCEN Rule”). The FinCEN Rule will add system transparency and help law enforcement identify risks from anonymous… Continue reading →