I have worked with a number of advisers who have never ever been examined by the SEC, not once in their 10 +, 15+, etc. years of existence. That may be a thing of the past. They will be the focus of the SEC in 2014, according to Andrew Boden, head of the SEC’s Office of Compliance Inspections and Examinations.
Of those, the agency will target firms that have been registered for more than three years and are domiciled in the U.S. Approximately 2,180 or so advisers should get their clue right now. Since the SEC typically examines eight percent of the 11,000 registered advisers it oversees, it is simple math that tells you that your chances to get a knock on the door in 2014 have just increased dramatically.
An SEC visit can be disruptive, or not, which is largely a function of the degree of preparation a firm displays. I would recommend starting the process now. For starters, I would read my prior blog on key things to keep in mind.
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Eckerle Law offers legal advice in a variety of transactional and regulatory matters and serves companies’ plenary business law needs. Its founder, Bettina Eckerle, is a veteran of Debevoise & Plimpton and Wachtell, Lipton, Rosen & Katz. She also served as the General Counsel of two companies en route to IPO. Please visit the Eckerle Law website for more details.