Investment Advisers News, Important Links and Other Information

Minnesota Department of Commerce-Securities Unit Examination Program

As a result of changes to Federal Securities Laws, the Minnesota Department of Commerce is now responsible for the supervision of more than 375 registered investment advisers.  A function of this oversight will be to periodically examine each investment adviser to ensure they are in compliance with State Securities Laws.

• Investment Advisor Registration Checklist (.pdf)
• Information Concerning the Examination Process (.pdf)
• Supplemental Information - Data Practices (.pdf)
• Written Supervisory Procedures Checklist for Investment Advisers (.pdf)

Legislation Affecting Investment Advisors Registered in Minnesota

• Minnesota Statute 80A
• Updates to Investment Advisors Regarding Recent changes in Legislation

Articles and Recent News

The following articles detail recent events impacting investment advisers.

• Examining The Risks of ETFs (fa-mag.com)
• Fees and sustainable retirement income (marketwatch.com)
• SEC Boosts Tally of Enforcement Successes With Routine Actions (bloomberg.com)
• COMPLY-FINRA reignites efforts to oversee investment advisers (reuters.com)
• Enforcement Report - October 2012 (NASAA - .pdf)
• State ups oversight of financial advisers (StarTribune.com)
• AIG buys Oakdale's Woodbury Financial   (StarTribune.com)
• SEC Investor Bulletin: How to Read an 8-K (SEC)
• Investment Advisers: What You Need to Know Before Choosing One, The Securities and Exchange Commission (SEC)
• Webinar to Help Raise Awareness of Challenges and Opportunities of Self-Directed IRA Investing, NASAA
• NASAA Reminds Mid-Sized Investment Advisers to Take Steps to Ensure Registrations are Active , NASAA
• U.S. state oversight of small investment advisers takes effect; exams and enforcement loom , REUTERS
• Investment Advisers: What You Need to Know Before Choosing One, SEC Investor Pub  - The Securities and Exchange Commission (SEC) receives many questions about investment advisers—what they are and how to go about choosing one. This document answers some of the typical questions we receive from investors about investment advisers. This Q & A is for the benefit of investors. You should not rely on it to determine if you need to register as an investment adviser.
• White House wants closer scrutiny of investment advisers, Investment News - While President Barack Obama's $3.8 trillion budget proposal for 2013 goes hard on the wealthy, it could also be tough on those who advise them.
• SEC Penalizes Investment Advisers for Compliance Failures, SEC News Release - The Securities and Exchange Commission today charged three investment advisers for failing to put in place compliance procedures designed to prevent securities law violations.
• Business Compliance Partners Reminds Investment Advisors About New Annual Amendment Requirements, PRWeb - An investment advisor is required to file an annual amendment within 90 days after the end of its fiscal year. December is the fiscal year-end for most investment advisors. Due to Investment Adviser Registration Depository (“IARD”) system availability the upcoming filing window is from January 3 to March 30, 2012.
• State files complaint against local investment advisor, Wicked Local Plymouth - The Secretary of the Commonwealth has charged the founder of a local investment firm with making misrepresentations to induce clients to make foreign currency exchange investments.
• Brownstein referenced in Kirk Kerkorian's lawsuit accusing investment adviser of "massive fraud", Denver Post - Billionaire Kirk Kerkorian, the largest shareholder in Denver-based Delta Petroleum, has sued the adviser who got him to invest $684 million in the Colorado company.
• Lawsuit Alleges that Irvine Investment Advisor Promoted Ponzi Scheme, Engaged in Elder Abuse Against Retirees, Heimanson & Wolf - LOS ANGELES – Today, the Los Angeles plaintiffs’ firm Heimanson & Wolf has filed claims against a well-known brokerage house and a former investment adviser for allegedly promoting Ponzi scheme investments and preying on retired Filipino-Americans.
• Complaints, legal action dog unlicensed Sarasota investment adviser, (.pdf) Tampa Bay Times - SARASOTA — Harvey Altholtz liked to brag about the millions he'd made from promising but penniless companies.
• 2011 Coordinated Investment Adviser Exams- NASAA - 2011 NASAA presentation
• SEC Enforcement: Key Developments in 2011 - 2011 SEC presentation
• SEC Administrative Proceeding: Feltl & Company, Inc. (.pdf)  - From February 2008 through March 2011, Feltl, a dually-registered broker-dealer and investment adviser, failed to adopt and implement comprehensive written compliance policies and procedures reasonably designed to prevent violations of the Advisers Act and its rules for its growing advisory business, as required by Section 206(4) of the Advisers Act and Rule 206(4)-7 thereunder. This failure resulted in Feltl engaging in hundreds of principal transactions with its advisory clients’ accounts without making the proper disclosures and obtaining consent in violation of Section 206(3) of the Advisers Act. It also resulted in Feltl charging undisclosed fees to its clients participating in Feltl’s wrap fee program by charging both wrap fees and commissions in violation of Section 206(2) of the Advisers Act. In addition, Feltl neglected to adopt a Code of Ethics and collect the required securities disclosure reports from its staff, as required under Section 204A of the Advisers Act and Rule 204A-1 thereunder. Feltl’s compliance breakdown was caused by its failure to invest necessary resources in the firm’s advisory business as it changed and grew in relation to its brokerage business. 

Investment Alerts

Investor Bulletin: Custody of Your Investment Assets (Securities and Exchange Commission)
Investor Alert:  Investment Seminars – Trading Seminar Fraud  (Securities and Exchange Commission)