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SEC Registered Firms Must Comply With New Marketing Rule By November 4, 2022

By Robert R. Boeche, Partner and Robert D. Conca, Partner of Shustak Reynolds & Partners, P.C. posted on Thursday, August 25, 2022.

As you know, in 2021, the SEC’s new Marketing Rule became effective with an outside compliance date of November 4, 2022. The new Marketing Rule contains numerous updates to the rules relating to how SEC registered investment advisers (“RIAs”) will need to conduct marketing and advertising activities. Read More

Jobs Act 4.0: What It Means

By Robert R. Boeche, Partner and Shahrzad Borna, Law Clerk of Shustak Reynolds & Partners, P.C. posted on Monday, August 22, 2022.

On the tenth anniversary of the 2012 “JOBS Act,” the Senate Banking Committee has proposed a new legislation, the “JOBS Act 4.0.” The new Act could potentially adjust SEC regulations to increase access to high-growth investment opportunities for everyday investors and reduce the costs of raising capital for small businesses. It also could have repercussions for licensed professionals operating pooled investment vehicles or otherwise conducting private investments. Read More

California A.B. 85 Waives First Year Taxes for Businesses Formed Before January 2024

By Robert D. Conca, Partner & Shahrzad Borna, Law Clerk of Shustak Reynolds & Partners, P.C. posted on Monday, August 8, 2022.

In the wake of the COVID-19 pandemic, California enacted Assembly Bill 85 (“AB 85”) [1] during the 2020-2021 legislative session to make certain changes to the California Revenue Taxation Code[2]. Among those changes was the elimination of the first-year annual tax for Limited Liability Companies (“LLCs”), Limited Liability Partnerships (“LLPs”), and Limited Partnerships (“LPs”), that organize, register, or file with the Secretary of State after January 1, 2021 and before January 1, 2024. Read More

SEC Warns Broker-Dealers and Advisers About Disclosing Conflicts of Interest

By George C. Miller, Partner of Shustak Reynolds & Partners, P.C. posted on Thursday, August 4, 2022.

Under both Regulation Best Interest (“Reg BI”) and the Investment Adviser fiduciary standard, firms and financial professionals should provide recommendations only when they have a “reasonable basis to believe that the recommendation or advice is in the retail investor’s best interest.” According to a recent SEC staff bulletin, complying with Reg BI and the fiduciary standard requires broker-dealers and investment advisers to identify and disclose conflicts of interest—particularly those tied to adviser compensation. The common practice of “checking a box” on forms, which generically disclose conflicts to clients, is not enough. [...] Read More

The Importance of Annual Reviews and Where to Start

By Robert D. Conca, Partner of Shustak Reynolds & Partners, P.C. posted on Thursday, June 16, 2022.

As most of us know, the SEC has remained active during the “COVID Era” and has been continuously examining, investigating, and enforcing the Investment Advisers Act of 1940, as amended (“Advisers Act”). A primary objective of the SEC's Division of Examinations' oversight activities is to determine whether registered investment advisers ("RIAs") are complying with regulatory requirements [...] Read More

FA Transition Bonuses On the Rise: What Was Old is New Again

By George C. Miller, Partner of Shustak Reynolds & Partners, P.C. posted on Friday, March 11, 2022.

Five years ago, Merrill Lynch, Morgan Stanley, UBS, and other large broker-dealers announced sweeping changes to their compensation policies, including a move away from the large, up-front recruiting “transition” bonuses that dominated the recruiting space over the prior decade. Those “bonuses,” often paid in the form of forgivable promissory notes with back- and front-end payouts regularly exceeding $1-2 million, resulted in firms holding billions of dollars in outstanding loans on their balance sheets. [...] Read More

Investors Still in the Dark over GWG Holdings "L" Bond Payments

By George C. Miller, Partner of Shustak Reynolds & Partners, P.C. posted on Tuesday, February 22, 2022.

In January 2022, GWG Holdings Inc., promoter of its high-yield bond product GWG L Bonds, reportedly missed $13.6 million in payments to investors on its GWG L bond series. Those bonds raised money to finance the purchase of life insurance policies from policy holders on the secondary market and were offered to investors primarily through independent broker-dealers, including Emerson Equity. [...] Read More

Is My NDA Enforceable? Recent Developments in California Law

By Katherine Bowles, Partner, and Aurora Gallardo, Law Clerk of Shustak Reynolds & Partners, P.C. posted on Tuesday, February 15, 2022.

Nondisclosure and confidentiality provisions have become common in employment separation agreements as more people have been speaking up about sexual harassment and discrimination they have faced in the workplace. [...] Read More

FINRA Updates Expungement Rules

By Robert Conca, Partner, and Aurora Gallardo, Law Clerk of Shustak Reynolds & Partners, P.C. posted on Friday, February 4, 2022.

Changes to broker expungements in arbitration seemed imminent when FINRA first proposed new rule changes of the expungement process to the SEC for approval. [...] Read More

FINRA Updates Continuing Education Program for Registered Persons

By Robert Conca, Partner, and Andrew Steiger, Law Clerk of Shustak Reynolds & Partners, P.C. posted on Thursday, February 3, 2022.

The Financial Industry Regulatory Authority (“FINRA”) recently announced important changes to its rules which deal with continuing education for registered persons. Updates to FINRA Rules 1210 and 1240 will create the new Maintaining Qualifications Program (“MQP”) [...] Read More