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First Circuit Limits SEC’s Reach on Investment Advisers

April 10, 2025 Topic(s): Asset Management / Investment Management; Broker Dealers

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.

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