When the SEC returned to its offices last week after the lengthy shutdown, it was greeted by a letter from SIFMA president Ken Bentsen, Jr. to Chair Atkins urging the Commission to “modernize” the communications and records-retention rules for broker-dealers, federally registered investment advisers, and security-based swap dealers. The letter was copied to each SEC Commissioner and Division Director, as well as to the President and Chief Legal Officer of FINRA.
Broker Dealers
First Circuit Limits SEC’s Reach on Investment Advisers
The First Circuit overturned an SEC win and disgorgement order against Commonwealth Equity Services for alleged violations of the Investment Advisers Act (“Advisers Act”). In a lengthy opinion, the court upheld traditional notions of materiality and rejected a “per se” rule for potential conflicts of interest, as well as finding related causation errors with the SEC’s disgorgement calculation.