SEC fines five in latest custody rule sweep
By 
Kyle Brasseur2023-09-06T20:36:00
The Securities and Exchange Commission (SEC) announced penalties against five investment advisers as part of its second targeted sweep regarding violations of its custody rule and Form ADV requirements.
The firms, each agreeing to pay fines ranging from $50,000 to $225,000, were accused of failing to comply with requirements related to the safekeeping of client assets, according to an SEC press release Tuesday. Three of the firms were cited for disclosure failures regarding audits of their private fund clients’ financial statements.
The custody rule, part of the Investment Advisers Act, requires advisers who have custody of clients’ funds or securities to follow specific requirements to prevent the loss, misuse, or misappropriation of those assets. The SEC in February proposed amendments to the rule that would require registered investment advisers to place nearly any asset, not just cash and securities, with qualified custodians.
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