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Compliance
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Advisor, A Prominent Utah Republican Fundraiser, Suspended As CFP After Being Charged With Sexually Assaulting Five Women |
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Thursday, August 30, 2012 23:26
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Gregory N. Peterson, an independent advisor and prominent Republican fundraiser in Utah, had his right to use the CFP mark suspended yesterday, but that's the least of his problems five weeks after being charged with sexually assaulting four women and a fifth woman came forward with similar allegations.
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Peterson, 37, according to charging documents filed by the District Attorney for Salt Lake County, is accued of 23 felonies and two misdemeanors that include assault, rape and kidnapping. He remains in jail, trying to arrange bail.
Criminal-Complaint-Gregory-Nathan-Peterson-Financial-Advisor
Prosecutors allege that, in March 2011, Peterson drove a woman he met at church to his cabin in Heber, Utah — a place where Peterson famously had hosted political fundraising events for prominent Utah Republicans — and sexually assaulted the woman at gunpoint.
Prosecutors further allege that, in July 2011, Peterson raped another woman after threatening to have her deported for an expired visa.
If you want all the salacious details, read the charging documents and see this website, which claims to be “cutting and pasting the truth about the GOP since who knows” and features of photo of Peterson with presidential candidate Mitt Romney. 
According to the prosecutor's office, Peterson met at least one of the five women he is alleged to have assaulted through activities at church, where he reportedly was was an active member.
Peterson was affiliated with Peterson Wealth Management and SmartStocks.com. He could face life in prison if he is guilty.
Peterson’s FINRA BrokerCheck report indicates he is no longer a registered representative whose license is held by an independent BD, and his Investment Adviser Representative Report shows that he is no longer registered as an IA rep.
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SEC Agrees To Propose Rule With 30-Day Comment Period That Would Allow Issuers Of Private Investors To Advertise To The Public |
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Thursday, August 30, 2012 12:54
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Tags: hedge funds | regulation | sec
The SEC voted Wednesday to fulfill one of the mandates of the JOBS Act (Jumpstart Our Business Startups) by allowing hedge funds and other issuers of private securities to advertise those offerings to the public. This Website Is For Financial Professionals Only
The rule stipulates that solicitations may only be made to accredited investors but it stops short of defining exactly the methods issuers must use to ensure investors are indeed accredited.
The issuer must know enough about the investor to make a sound judgment and must also consider how the investor was solicited as well as terms of the investment such as minimum investment amount.
Issuers have been pushing the SEC to accept signed statements from investors that they are accredited. State regulators want the SEC to require proof of accreditation through financial statements and tax and income records.
The commission had planned to issue interim rules last week but industry participants insisted on having the customary 30-day comment period. The change of heart caused some friction among commissioners who had wanted a rule to go into effect on August 22.
Section 501 of SEC Regulation D mandates that accredited investors have individual net worth or joint net worth with a spouse of at least $1 million at the time of investment.
The net worth figure includes the person’s primary residence.
An alternative way to meet the standard is to have at least two years’ worth of annual income at $200,000 or more or of $300,000 annual income with a spouse.
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Registrations Are Not Optional |
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Tuesday, August 21, 2012 11:06
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Tags: IAR Registration | NAPFA | RIA compliance | RIA Registration | Service Bureau Last night, an unfortunate public statement was issued by Ron Rhoades, Chair-Elect of NAPFA, regarding his failure to timely register his firm and himself as an investment adviser representative in Florida.
You can stop reading if you are looking for someone to bash Mr. Rhoades with a "you should know better" lecture. His statement already acknowledges this point.
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Registrations and notice filing requirements in the states are in no way optional. You are either following the regulations or you are not. This is a very common deficiency that comes up in virtually every Mock Exam or new compliance on-boarding that my firm conducts.
Advisors, you must take this seriously. You should be running a regular client geography report to monitor your relationships in various jurisdictions. The definition of a client is also important. As an example, a husband and wife are generally considered one (1) client if both are party to the agreement and the needs of both are considered when making any investment decisions for any of the accounts.
A trigger should be set to formally evaluate whether registration is required. For states that follow the de minimis standard of 5 clients (assuming no place of business), you should evaluate when you reach four (4) clients. If you find yourself with 4-5 clients in late summer or fall, you need to decide whether you will accept new clients in those states, not whether you can hold off in registering. (Note: New Hampshire, Nebraska, Louisiana and Texas do not follow the de minimis standards and require action before taking on any clients. Texas is a hybrid that requires a "notice filing" before client #1 and full registration BEFORE client #6).
SEC advisors certainly have an advantage here. They need only "notice file" the firm and depending on the state, may not even need to file IARs. State advisors really need to plan ahead. With the state registration process generally taking 30-90 days, you can't wait until you are off to meet prospective client #6. You won't be able to legally enter into that agreement.
Remember, the states are not out there to create issues for advisors. They are there to protect investors. There is little, if any, flexibility in the regulations to allow a state to give you a pass when failing to register. This is an easy process to stay on top of.
NAPFA, you are once again sending the wrong message to the industry. The lesson here should not be "if you make a mistake you should go away."
Given the prior issues, I understand the reaction though. NAPFA's responsibility is to guide your members in running world-class firms. Mistakes will happen (and are expected). How you deal with them is of the highest importance.
Rule 206(4)-7 of the Investment Advisers Act of 1940 (the "CCO Rule") was designed with the core principles of continuous improvement and accountability. Firms are run by people and people make mistakes. Regulators are weary of any advisors that claim to have an error free compliance record. The first question pondered is whether anyone is looking for issues? Identifying, correcting and preventing future occurrences are the key goals of the CCO Rule.
We hope NAPFA at least takes the opportunity to provide some education around this matter and not focus so heavily on reputation management.
Read more...
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No Criminal Case Likely In $1 Billion Loss At MF Global; Is America Any Better At Policing Corporate Corruption Than China? |
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Thursday, August 16, 2012 14:14
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Tags: regulation
According to a report in today’s New York Times, a criminal investigation into the collapse of the brokerage firm MF Global and disappearance of about $1 billion in customer money is in its final stages and no criminal charges are expected against any top executives, including New Jersey’s former Governor who ran the firm.
“Investigators are concluding that chaos and porous risk controls at the firm, rather than fraud, allowed the money to disappear,” says The Times.
Do you buy that? Can $1 billion get misplaced accidentally without criminal intent? This Website Is For Financial Professionals Only
When will Wall Street enforcement get serious and start putting people in jail?
While we Americans love to point out at how corruption in China enables baby toys to be sold with lead in them, shoddy construction that ignores building codes, or pollution of the air and water, is America really any better at policing corruption?
We won’t clean up the crooked capital markets that caused the mortgage crisis and allowed Wall Street to get away with robbery until we hold people accountable for their actions.
No one has gone to jail for the mortgage crisis, which has cost Americans billions of dollars in losses and bailouts, not to mention widespread crisis in homes across the nation.
Read more...
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FINRA Conducting Swath Of Investigations To Get To Know Broker-Dealer Practices |
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Friday, August 10, 2012 11:23
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Tags: FINRA | independent broker-dealers | regulation
FINRA is conducting a wide sweep of investigations of broker-dealers on conflicts of interest. FINRA claims it simply wants to get to know broker-dealer practices better. But industry attorneys say FINRA could be ramping up for increased enforcement actions. This Website Is For Financial Professionals Only
The focus of the investigations is to determine how firms manage conflicts of interest and whether those conflicts actually place the firm’s interests ahead of their clients’. FINRA says it wishes to better understand whether firms are taking appropriate actions to appropriately identify and manage conflicts that would affect either their clients or the marketplace.
The letter sent out to firms under investigation is unclear about FINRA’s true intentions. It doesn’t clarify whether FINRA is creating new rules or looking for violators of existing ones. Observers feel FINRA has already made judgment on the firms under investigation and that it is simply looking to substantiate its cases. |
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