Mary Jo White's
top cop won't say whether or not he has more "distribution in guise" cases in the works against fundsters, but that First Eagle
case is still on his mind.
| Andrew Ceresney|
The Securities and Exchange Commission
Director, Division of Enforcement
, director of the SEC's
division of enforcement, spoke this morning to fundsters lawyers and directors at the 2016 ICI Mutual Funds and Investment Management
conference at the J.W. Marriott Grande Lakes in Orlando. Ceresney spoke alongside three other panelists: Heidi Hardin
, general counsel for Harris Associates
; Ghillaine Reid Melbourne
, partner at Schoeman Updike & Kaufman
; and Marc Wyatt
, director of the SEC's office of compliance, inspections, and examinations.
Hardin called the First Eagle case from September 2015 (which involved a settlement of nearly $40 million) a "classic enforcement" action that was "fairly cut and dry." She asked Ceresney about any other similar "potential actions" on the SEC's plate.
"What's on your agenda?" Hardin said. "Are you almost done?"
"I can't foreshadow what's coming," Ceresney replied.
Yet he did call the First Eagle situation "a case with a clear violation." And later, when Hardin asked what is "the most important enforcement action in the last year in the mutual fund advisory space," Ceresney offered a hint as to what's on his mind enforcement-wise. He gave three answers: the first was the First Eagle case.
For a second "important enforcement action in the last year in the mutual fund advisory space," Ceresney pointed to the $9.5-million settlement the SEC unveiled
yesterday with three broker-dealers that AIG
is selling off. (The B-Ds are FSC Securities Corporation
, Royal Alliance Associates
, and SagePoint Financial
.) That case is just the latest in a string recent settlements with B-Ds where investors (often times retirement plans or other institutional investors) were put in higher-fee retail shares when they were eligible for using lower-fee share classes.
For a third answer, Ceresney didn't point to a specific case or settlement, instead describing a type of issue where the SEC staff like to see fundsters "having appropriate procedures" in place.
"Valuation issues continue to be something that we're focused on," Ceresney said.
Ceresney, Hardin, Reid Melbourne, and Wyatt also discussed a variety of other issues, including the SEC's use of big data, cybersecurity concerns for both fundsters and regulators, the rise of whistleblowers, the logic behind self-reporting violations, and more.
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