SEC Charges Exempt Reporting Adviser’s CCO for False Statements in Forms ADV

24 January 2017
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Key takeaways

  • The U.S. Securities and Exchange Commission (“SEC” or the “Commission”) on January 19, 2017 filed its first-ever action against the Chief Compliance Officer (“CCO”) of an exempt reporting adviser.  In doing so, the Commission makes clear that it will continue to charge CCOs, including CCOs of exempt reporting advisers, for violations related solely to their compliance function in certain circumstances.
  • The SEC’s case underscores the expansive approach the SEC is taking toward CCO liability and confirms that CCOs, including CCOs at exempt reporting advisers, should take steps to confirm that the responses to Form ADV are accurate.