Financial Services Litigation & Regulation
Strategic Discovery & Information Management
We represent investment advisors and RIA investors in a wide variety of matters. Our services include performing legal and compliance due diligence for our clients’ acquisitions of RIAs. We work directly with the RIAs to conduct risk assessment reviews, annual compliance reviews, and compliance training. We also conduct internal investigations; represent RIAs during SEC and state examinations, investigations, and enforcement actions; and advise RIAs on regulatory and compliance matters.
In addition, we offer a full suite of transition-related services to advisors forming new RIAs, including advising on employment transition and risk mitigation issues; entity formation; Form ADV completion and filing; and drafting business agreements, advisory contracts, compliance manuals, and code of ethics documents.
We also represent broker-dealers, RIAs, and their advisors in litigation stemming from general commercial disputes, as well as litigation arising from advisor departures and recruitment. We have successfully litigated TROs in federal and state courts across the country, negotiated favorable settlements on our clients’ behalf, and defended advisors in arbitration proceedings brought before FINRA and other arbitration venues.
Morgan Stanley’s and UBS’s 2017 exit from the Protocol for Broker Recruiting led to an uptick in litigation stemming from advisors’ departures from wirehouses, and we expect to see this trend continue in 2019. In fiscal year 2018, SEC RIA enforcement actions totaled 821, an increase of nearly 32%. Stand-alone enforcement actions at the state level increased to 108 during this time. With the SEC remaining laser-focused on the “Main Street investor,” we expect 2019 to be another year of increased OCIE examinations resulting in increased referrals to enforcement. We believe there will be particular emphasis on ensuring that RIAs are making clear, plain-language disclosures to clients regarding the nature of their relationship, conflicts of interest, and fees. Cybersecurity also continues to be a hot topic area for the SEC, with 225 open cybersecurity-related investigations. In 2018, we saw the first action charging violations of Regulations S-ID, known as the Identity Theft Red Flags Rule. We anticipate cybersecurity enforcement actions to continue to increase.