This Week In Securities Litigation (Week of November 11, 2024)
The Commission filed only one new case last week. It focused on false statement made by an investment adviser regarding references to ESG in discussions regarding the management of funds and investments. The advisory appeared to have no standards regarding ESG.
Be careful, be safe this week
SEC
Remarks: Keith Cassidy, Acting Director, Division of Examinations, delivered remarks at the National Compliance Outreach Seminar, on November 7, 2024. His remarks were titled Compliance: Staying on Mission. The comments focused on how to strengthen compliance (here).
Remarks: Sanjay Wadhwa, Acting Director, Division of Enforcement, delivered remarks at the Securities Enforcement Forum, Washington, D.C. 2024, Nov. 6, 2024. He focused on points to evaluate when resolving enforcement investigations (here).
Remarks: Commissioner Hester M. Peirce delivered remarks titled Hobs and Hobbes: Wharton FinTech Lecture, on Nov. 1, 2024. Her remarks focused on the balance necessary when regulating the markets here.
Future events: The PLI 56th Annual Institute on Securities Regulation to be held on November 14, 2024, will feature an appearance by Commission Chair Gary Gensler..
SEC Enforcement – Filed and Settled Actions
Statistics: Last week the Commission filed no new civil injunctive actions and 1 new administrative action, excluding tag-along actions and those that present a conflict for the author.
False statement: In the Matter of Invesco Advisers, Inc., Adm. Proc. File No. 3-22306 (Nov. 8, 2024) is a proceeding which names the registered investment adviser as Respondent. The firm, based in Atlanta, Georgia, has over 37,000 clients with about $746 billion in regulatory AUM, over 37,000 clients and about $746 billion in regulatory AUM, including over 450 pooled investment vehicles that collectively hold over $580 billion. The proceeding centers on a period from April 2020 to July 2022. During that period the Order alleges that the firm made misleading statements regarding the use of the term ESG integrated in presentations to boards and others. By late 2019 Invesco believed that ESG considerations were commercially important. An internal analysis demonstrated that at least $370 billion in AMU was at risk of moving to a new advisory based on ESG integration considerations. As part of its marketing efforts the firm made claims about the percentage firmwide of AMU that was ESG integrated. The percentages used in presentations varied from 70% to 94%. The variations depended on how the tabulation was done – no comprehensive set of written policies and procedures was used to make the estimates. Indeed, the advisory did not have a comprehensive set of written policies and procedures that determined how the calculations should be done. Accordingly, the Order alleges violations of Advisers Act Sections 206(2) and 206(4) and Rules 206(4)-1 and 206(4)-7 and 206(4)-8. To resolve the proceedings Respondent cooperated with the investigation and consented to the entry of a cease-and-desist order based on the Sections and Rules cited in the order. In addition, the firm is censured and will pay a penalty of $17.5 million.
Hong Kong
Program: The Securities & Futures Commission hosted a forum to encourage responsible Reg-tech adoption for anti-money laundering and the counter-financing of terrorism, November 4, 2024 (here).
Singapore
Transcript of forum: The Monetary Authority of Singapore held a “fireside chat” involving Chia Der Jium, Managing Director, Monetary Authority of Singapore, with Ms. Manisha Tank, Broadcaster & TV Presenter, at Singapore FinTech Festival, 2024, on 7 November 2024. A transcript of the program is available here.