SEC's Examination of RIAs Focuses on Leadership Changes

Posted on September 14th, 2023 at 10:09 AM
SEC's Examination of RIAs Focuses on Leadership Changes

From the desk of Jim Eccleston at Eccleston Law 

The Securities and Exchange Commission’s Division of Examinations issued a risk alert announcing its new focus.

The alert outlines the circumstances under which firms can anticipate regulatory scrutiny and specifies the documents they should be ready to provide. According to the alert, the SEC examines approximately 15 percent of the 15,000 advisers registered with the SEC each year.

The SEC may focus its attention on a firm based on various factors, including the firm's prior examination or conduct records, supervisory concerns such as the disciplinary history of advisors, conflicts of interest, the duration since its registration or last examination, significant changes in leadership or staff, and media reports. Additionally, the firm's susceptibility to financial and market pressures, previous disclosures, control over investor assets, and exposure to "service provider-related compliance risks" can trigger regulatory scrutiny, as outlined in the alert.

As reported by AdvisorHub, the SEC also is intensifying its enforcement of its marketing rule, which became effective in December 2020 and mandates that Registered Investment Advisors (RIAs) must ensure they have a reasonable basis for substantiating material statements of fact, and performance advertising, testimonials, endorsements, and third-party ratings, as stated in a previous risk alert.


Eccleston Law LLC represents investors and financial advisors nationwide in securities, employment, transition, regulatory, and disciplinary matters.

Tags: eccleston, eccleston law, sec

Return to Archive



Thank you so very much for your guidance, patience, and expertise.

Beth and Steve K.


June 14, 2024
Wells Fargo Fires Employees for Faking Work

Wells Fargo & Co. recently terminated over a dozen employees following an investigation into allegations of fake work activities.

June 13, 2024
FINRA Struggles to Revise Outside Business Rules

The Financial Industry Regulatory Authority’s (FINRA) attempt to update its rules on advisors’ outside business activities has stalled, according to Robert Colby, FINRA's chief legal officer.

June 12, 2024
Tax Court Denies Madoff Victims $8.2 Million Deduction

Victims of Bernie Madoff's Ponzi scheme, Christopher and Silvana Pascucci, cannot claim an $8.2 million tax deduction for their investment in life insurance premiums.