Philadelphia partner Mary Hansen, Chicago partner Jim Lundy, and associate Taylor Mullaney authored “The Robare Ruling Regarding ‘May’ Disclosures and ‘Willfulness’” for Westlaw Journal’s Bank & Lender Liability.
The DC Circuit recently agreed with the SEC that the use of the word “may” in an investment adviser’s disclosure of conflicts of interests violates certain sections of the Investment Advisers Act of 1940. In this article, Mary, Jim, and Taylor analyze the court’s findings in Robare Group, Ltd. v. SEC, a case predicted upon whether certain language in disclosures to clients was adequate.
SEC Enforcement had found that The Robare Group’s disclosures, including “may receive selling compensation” failed to depict the extent of its financial relationship with Fidelity Investments. In its appeal, Robare had argued that SEC Enforcement had not presented sufficient evidence in the administrative proceedings to support such allegations.