Investment advisor breached GIPS in some newsletters it sent to prospective clients. Petitioner and his investment firm sought review of an SEC determination that they made material misrepresentations to prospective clients by sending newsletters which omitted information required under Global Investment Performance Standards (GIPS). Based on these violations, the SEC imposed monetary and other sanctions. The Eleventh Circuit vacated sanctions related to one newsletter that expressly stated in a disclaimers section that the investment report was not GIPS-compliant. The panel affirmed all other sanctions, agreeing that petitioner did, in fact, breach GIPS in ads, newsletters and certifications. (6/30/2017) ZPR Investment Management Inc. v. Securities and Exchange Commission.
Pursuant to Kokesh, court’s disgorgement order against unregistered broker is time-barred. The SEC brought an action against defendant for acting as an unregistered broker. A district court granted the SEC summary judgment, permanently enjoining defendant and ordering disgorgement. Defendant appealed, contending that he qualifies for a “finder exception” to broker registration, and that a statute of limitations bars the injunction and disgorgement. The Eighth Circuit vacated the disgorgement order as time-barred under the U.S. Supreme Court’s decision in Kokesh v. SEC. The panel, however, determined that the SEC did not err in determining that defendant was acting as an unregistered broker. (6/29/2017) United States Securities and Exchange Commission v. Crawford.