NASAA Released 2019 Annual Enforcement Report (based on 2018 data)
A late evening post from Sonja Rae @ RIA-CCO, not quite feeling “cheery” as usual; I spent most of the day in the dentist chair and I look like a chipmunk!
But, earlier this month, the North American Securities Administrators Association (NASAA) released its annual enforcement report, which shows state securities regulators were responsible for more than $1 billion in monetary relief ordered as a result of their enforcement actions in 2018. In this 2019 Enforcement Report (2018 data) it states that state securities regulators conducted 5,320 investigations in 2018 and took 2,067 enforcement actions. These actions led to more than $558 million in restitution ordered returned to investors, fines of $490 million and criminal relief of 1,753 years, including incarceration and probation.
The report details enforcement actions against both registered and unregistered firms. Within the licensed securities industry, a five-year high in enforcement against investment adviser firms is notable content. Also, state regulators reported that 17% of their actions involved investment adviser firms, more than any other category of registered individuals. As I have previously mentioned, the states are taking a very strong stance on regulating RIA’s, in comparison from last year… and it has nearly doubled since 2014!
RIA’s should have their Chief Compliance Officer or “CCO” review the report and evaluate if they are vulnerable in the main focus areas, as well as others.
The TOP 4 areas of deficiency in the 2019 report were:
- Books & Records
- Contracts
- Proper Registraton
- Supervision
For a deeper dive, the FULL report is available on NASSA website which is the source of this content.
As a reminder; RIA-CCO is not a law firm, investment advisory firm, or CPA firm. RIA-CCO does not provide legal advice. Always consult your relevant regulatory authorities or legal counsel, if applicable, in regards to content within my website.
