STUDY FOR THE SERIES 66 EXAM

Here's an interesting SEC case involving charges of investment fraud leveled against an investment adviser and a mutual fund to which he provided investment advice. The SEC charges Joshua Goltry and his investment advisory firm, JAG Capital Advisors LLC, with hyping the value of the JAG Fund by "lying about nearly every aspect of the fund, including its performance, investment activity, and investment risks," and using investor money to pay for his own lavish life style. FOR IMMEDIATE RELEASE 2024-72 Washington D.C., June 12, 2024 — The Securities and Exchange Commission today charged Joshua Goltry and his investment management firm, JAG Capital Advisors LLC (JAG Advisors), in connection with a three-year scheme to defraud investors of at least $3 million. According to the SEC’s complaint, from 2020 to 2023, Goltry, the founder and Chief Investment Officer of a purported equity fund called JAG Cap, LLC, and JAG Advisors, the purported equity fund’s investment manager, rai...

  The Series 66 Exam covers SEC Rules including Regulation S-P on the privacy of consumer financial information and the safeguarding of customers' personal information and data. NASAA indirectly lists Regulation S-P in its Series 66 Test Specifications in Section IV (H) (5) under Privacy and Data Protection. Recently the SEC has amended Regulation S-P "to  address the expanded use of technology and corresponding risks that have emerged since the Commission originally adopted Regulation S-P in 2000."  The amendments cover situations where computer hackers unlawfully view, copy or steal  a firm's customer accounts records . Brokerage and advisory firms, including mutual fund firms, are required to detail steps in writing to be taken when a brokerage firm suffers such a break-in. Firms must also report such events to the SEC as soon as possible, but no later than 30 days of occurrence. Furthermore, firms must notify customers whose accounts are, or reasonably likely to ...

  If you plan to sit for the Series 66 exam, make sure that you are familiar with the SEC's policy on    Ethical Practices and Fiduciary Responsibilities , what they are and how you can avoid violating them.  Bob Eder in his  Study for the Series 66 Exam  devotes a whole chapter to Ethical Practices and Fiduciary Responsibilities. Here is an interesting news release from the SEC describing one investment adviser's taking undisclosed monies from a movie producer as compensation for recommending investing in films of that production company. Warning: Don't take undisclosed money or compensation in return for steering your clients to specific investments! SEC Charges Hudson Valley Wealth Management Advisory Firm and  Founder for Failing to Disclose Conflicts of Interest Firm owner received undisclosed fee for investing clients’ money in films FOR IMMEDIATE RELEASE 2024-55 Washington D.C., May 14, 2024 — The Securities and Exchange Commission today announc...

Taking the Series 66 in the near future? If so, then you should know that the SEC has changed the rules governing Regular-Way Settlement from two business days to only one business day.  Regular-Way Settlement  will be T+1, not T+2. The effective date of this rule change is one week from tomorrow, or May 28, 2024. Furthermore, the rules of the Fed for payment in both cash and margin accounts now becomes three business days following trade date, or T+3. The former Fed rule was T+4. Make sure that you know these new rules. Here is the link to NASAA's Test Specifications   for the Series 66 Exam . See Section III (J) (1) covering Regular-Way Settlement. Bob Eder discusses  Regular-Way Settlement in his  Study for the Series 66 Exam . Study for the Series 66 Exam  i s available from Amazon in both paperback and Kindle e-book versions.  Here is the link to Bob Eder's Series 66 book on Amazon .   For questions about Bob Eder...

Here's an interesting release from the SEC on penalizing five investment advisory firms for violations of the Marketing Rule. All five investment advisers published hypotheticals on their websites " without adopting and implementing policies and procedures reasonably designed to ensure that the hypothetical performance was relevant to the likely financial situation and investment objectives of each advertisements intended audience, as required by the Marketing Rule. "  One advisory firm was also penalized for " including false and misleading statements in advertisements, advertising misleading model performance, being unable to substantiate performance shown in its advertisements, and failing to enter into written agreements with people it compensated for endorsements. " FOR IMMEDIATE RELEASE 2024-46 Washington D.C., April 12, 2024 — The Securities and Exchange Commission today announced settled charges against five registered investment advisers for Marketing R...

Did you know that the SEC requires that an investment adviser must provide a "Brochure Supplement" to every client who receives  advisory information and advisory services from  one of the adviser's supervised employees? This requirement is found in Part 2B of Form ADV.  The investment adviser or advisory firm must provide a Brochure Supplement for each supervised individual (1) who develops or formulates investment advice for a client   and   who has direct contact with that client; or (2) who makes investment decisions for that client on a discretionary basis,   even if   this employee has no direct contact with the client. Here's how the SEC describes the Brochure Supplement, which is actually Part 2B of Form ADV: The brochure supplements contain information about the educational background, business experience, and any disciplinary history of the specific individuals who provide advisory services to the client. Brochure supplements may be separate ...