The Securities and Exchange Commission will continue its crackdown on private funds in 2020, according to Adam Aderton, co-chief of the SEC Enforcement Division’s Asset Management Unit.
“We will continue to see these cases” against private funds, Aderton said during a Wednesday panel at Securities Docket’s 2019 Securities Enforcement Forum in Washington.
Aderton also said he believes the agency’s Retail Strategy Task Force has been “very effective, and has been doing what they said they’d do,” which is harnessing big data to “find cases.”
The Retail Strategy Task Force is a “relatively small group that does a lot of data cranking,” Aderton said, stating the task force is also “doing work” in the asset management space as well as with the agency’s cyber and complex instruments units.
The agency’s teacher and military initiatives have also fallen to the Retail Strategy Task Force, Aderton said.
He added that the task force also brings enforcement cases, but the group “is really a resource for the rest of” the commission.
When asked if the task force also finds trends, Aderton responded that the group is looking for “fraud and market conduct” that impacts retail investors. “The idea behind all the big data that we’re doing [at the agency] and in enforcement is [to identify] is there a practice or is there a course of conduct that we can find through data analysis.”
The agency announced on Oct. 15 several teacher investment outreach efforts in connection with its Teachers Initiative.
The outreach efforts, according to the agency, “advance the commission’s commitment to protecting America’s educators when they invest in the securities markets by informing educators about the importance of savings and investing, researching investment products and financial professionals before investing, and identifying the red flags of investment fraud.”
The SEC announced in June two new initiatives that will build on its ongoing efforts to protect retail investors. The Teachers’ Initiative and the Military Service Members’ Initiative will build on the commission’s past efforts and focus additional enforcement and investor education resources on behalf of teachers, veterans and active-duty military personnel stationed domestically and abroad.
— Check out SEC Issues FAQ on 12b-1 Fee Disclosure Obligations on ThinkAdvisor.