RIA Lawyer
Registered Investment Advisors Team Lead
Former DOJ Trial Attorney
Contact John directlyThe securities litigation attorneys and securities compliance personnel at the national law firm Oberheiden P.C. strive to help registered investment advisors (RIAs) comply with the law, grow their business, and fend off allegations of misconduct. Whether you or your firm needs guidance with RIA compliance, registration, or arbitration services, our attorneys should be at the top of your list of people to call.
RIA Compliance
RIAs have to comply with some of the most complicated of the federal securities laws on the books. Even where their legal obligations are clear, meeting them can be difficult or can be done in several different ways. Worse, compliance requirements evolve over time and new obligations can arise, like those created by loans under the Paycheck Protection Program (PPP). And this is to say nothing of the compliance requirements imposed by state securities laws.
The compliance professionals at the law firm of Oberheiden P.C. bring the risk-averse and forward-thinking focus that is necessary for success in compliance endeavors, coupled with the legal savvy of highly skilled and experienced securities litigation attorneys. Our proactive approach can help RIAs come into legal compliance in a wide variety of issues, including:
- ADV Forms, including regular ADV amendments, such as the annual Schedule I amendment
- CRS Forms
- Reviewing marketing and sales practices
- Code of Ethics
- Conflict of interest reviews
- Privacy policies
- Business continuity plans
- Cybersecurity and data retention policies
- Policy and Procedures Manuals
- Maintenance of books and records
- Investment advisory contracts
- U4 and U5 filings
- Business practices brochures
With our help and guidance, you can rest assured that you are as prepared for an audit by the Securities and Exchange Commission (SEC) as you can be, and that your firm is operating lawfully.
Put our highly experienced team on your side
RIA Registration
Most RIAs have to register with the SEC or with state regulators before they can legally operate. However, registering with the SEC entails far more than just filing a few forms. The agency is very concerned with protecting investors and the public in general. The SEC is going to scrutinize every aspect of your registration package to ensure that you and the members of your investment advising firm are trustworthy enough to handle other peoples’ money. This includes close readings of your:
- Policy and Procedures Manual
- Code of Ethics
- Form ADV
- Compliance Program
If these documents are not up to standard, the registration application will be denied, dealing a blow to your professional ambitions. Worse, if you try to register again, there is a very good chance that the regulators reviewing the registration package are going to pay extra close attention to where it was lacking the first time through, increasing the odds of another rejection.
However, there are some exemptions from the registration requirement that may apply to the RIA firm that you want to form. A couple of the most common exemptions from federal registration include:
- The creation of your firm is in reliance on Rule 203A-2(c) and you anticipate becoming eligible for SEC registration within 120 days
- You are an RIA that is required to register in at least 15 states
- You are a related advisor under common control of an investment adviser who is registered with the SEC
- Your RIA firm would be in New York and would have regulatory assets under management of between $25 million and $100 million
Falling into one of these exemptions can make things much easier. However, if you mistakenly believe that you are exempt from the federal registration requirement when you are actually not exempt, you could be in significant legal jeopardy.
RIA Arbitration
RIAs can be accused of wrongdoing by a variety of different parties and for a variety of different reasons. When they do face these allegations, the claims are generally funneled into arbitration through securities regulations or the contracts between the RIA and the complaining party. Just because the dispute is in arbitration, though, does not mean that it is a trivial one or that the penalties of an adverse finding by the arbitrator can be a huge blow to the RIA.
The securities litigation defense lawyers at Oberheiden P.C. represent RIAs in arbitration proceedings all the time.
These claims can be filed by parties such as:
- Customers
- Clients
- SEC personnel
- Financial Industry Regulatory Authority (FINRA) investigators
- Whistleblowers
- Investors
- Securities issuers
In many cases, the person or party filing the claim will have signed a contract with the RIA or the RIA firm that mandates arbitration of the dispute. In these cases, the arbitration provision will often name the arbitration service that will hear the claim, like JAMS.
In other cases, though, the dispute will trigger FINRA’s jurisdiction to hear the claim. These tend to be more severe, and frequently allege an instance of securities misconduct or even fraud, such as:
- Churning client accounts to maximize transaction fees
- Breach of contract
- Breach of fiduciary duty
- Omission or misrepresentation
Regardless, cases that go to arbitration carry the potential for some substantial penalties being levied against the firm. Worse, they can escalate to civil litigation or even criminal charges of securities fraud.
Several Questions that the RIA Lawyers at Oberheiden P.C. Frequently Get Asked
What are Some of the Federal Securities Laws that RIAs Have to Comply With?
Just a few of the federal laws that RIAs have to follow are the:
- Investment Company Act of 1940
- Investment Advisers Act of 1940
- Trust Indenture Act of 1939
- Securities Act of 1933
- Securities Exchange Act of 1934
- Dodd-Frank Act of 2010
- Sarbanes-Oxley Act of 2002
However, several of these laws give the SEC broad legal authority to promulgate rules and regulations that the agency has used to go far beyond the narrow wording of the legislation. Additionally, FINRA is a self-governing securities agency that issues its own rules for covered securities professionals.
Finally, state securities laws may impose additional compliance requirements.
What are the Penalties of Noncompliance?
The issues that you can face for not complying with state or federal securities laws will depend on the nature of the noncompliance and how severe it was.
In the most severe cases, the noncompliance can amount to securities fraud. For example, not taking the necessary precautions to compartmentalize and sequester client funds from the RIA firm’s assets can lead to them getting comingled. If this happens and client funds are used for firm purposes or for personal use, it can lead to criminal allegations of embezzlement, which carries huge criminal fines and even the potential for prison time.
However, even minor deviations from compliance can lead to sharp scrutiny from regulators that can hurt your professional ambitions and the firm’s efficiency. For example, failing to maintain adequate recordkeeping practices may not hurt anyone or lead to any client funds being lost. However, it can make regulators from the SEC or FINRA pay more close attention to the firm’s subsequent filings or even schedule an audit that saps the firm’s resources.
Why Should I Call Oberheiden P.C.?
Oberheiden P.C. is a unique law firm in that we are comprised of senior-level attorneys as well as experienced compliance professionals and investigators. For RIA professionals and firms, this makes us the perfect group to call for defense and compliance needs: We are a one-stop-shop for avoiding allegations of misconduct by strictly complying with the law, and for defending against these allegations if they have already arisen.
Additionally, should you need legal defense against criminal or civil allegations or in front of an arbitrator, you can rest assured that the senior-level lawyer whose experience drew you to Oberheiden P.C. will be the one to represent you: We do not employ paralegals or junior associates at Oberheiden P.C., so we cannot delegate your case to one.
What Does it Mean to be a “National Law Firm”?
While Oberheiden P.C. has its main law offices in Houston and Dallas, Texas, we also have satellite offices in nearly every major American city. Regardless of where your RIA firm is located, we have experienced attorneys and compliance professionals nearby to help you with your needs.
Why Doesn’t Oberheiden P.C. Call Itself the Best Firm for RIA Defense and Compliance?
Because that is the sort of thing that means far more when it comes from our prior clients, rather than from us. You can read their testimonials about our firm’s services here.
Oberheiden P.C.: National RIA Attorneys for Compliance and Defense
RIA firms and individuals face a daunting legal landscape, especially when first venturing into the field. There are numerous laws and regulations to follow, often with vague or seemingly conflicting requirements to be met. These obligations change frequently, too, as the SEC and FINRA – the agencies behind most of them – do not need much government input before they can alter the regulations that help them enforce securities laws. These changes can drastically alter the legal obligations that RIAs have to meet. Constantly revisiting your compliance mechanisms and the obligations that you and your firm have is a fundamental aspect of a good compliance system.
The compliance professionals and securities litigation attorneys at Oberheiden P.C. help individual RIAs and RIA firms reach a level of compliance that minimizes their exposure to legal liability and lets the investment advisors focus their attention on their clients and their business goals.
Contact them online or call their national phone number for help: (888) 680-1745.