January 25, 2022

Volume XII, Number 25

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January 24, 2022

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Investment Advisers - NASAA Issues Report on Issues Found in Investment Advisers Exams

On October 3, 2011, the North American Securities Administrators Association (NASAA) issued a report on a series of coordinated examinations of investment advisers by 45 state and provincial securities examiners. The report identifies investment adviser deficiencies and recommends best practices that investment advisers should consider to minimize the risk of regulatory violations. The top five categories with the greatest number of deficiencies involved registration, books and records, unethical business practices, supervision, and advertising. As many previously exempt investment advisers are now preparing to register, we note the top registration deficiencies were inconsistencies between parts 1 and 2 of form ADV and failing to amend form ADV in a timely manner.

Among hedge fund advisers, the top deficiencies included valuation of holdings, cross trading, preferential treatment, registration-exemption issues, non-accredited investors issues and non-disclosed conflicts of interest. A copy of the report is available here.

©2022 Greenberg Traurig, LLP. All rights reserved. National Law Review, Volume I, Number 297
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About this Author

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Ms. Durham has experience on both the legal and business sides of derivatives, private funds, complex financing transactions, and structured products. Prior to joining Greenberg, she was an investment banker and Head of Structured Equity Products at BNP Paribas where she concentrated on structuring equity financing and equity derivative transactions for corporations and hedge funds. Prior to BNP, she was a partner in the Corporate Dept. at the law firm of Weil, Gotshal & Manges LLP.

Ms. Durham has been involved as both a lawyer and...

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