July 13, 1990
TO: INVESTMENT ADVISER MEMBERS NO. 31-90
INVESTMENT ADVISER ASSOCIATE MEMBERS NO. 28-90
RE: ADVISER CENSURED FOR USE OF SOFT DOLLARS
OUTSIDE SECTION 28(e)
__________________________________________________________
The SEC recently censured an investment adviser and its
president for improperly using soft dollars to pay for services
outside the safe harbor of Section 28(e) of the Securities
Exchange Act and failing to disclose the arrangements as required
in its Form ADV or in brochures sent to clients. The soft dollar
payments were provided to another investment adviser (who
received payments from brokerage directed to specified firms), in
exchange for training in marketing techniques to the employees of
the censured investment adviser.
In connection with this case, the SEC also censured a
broker-dealer for failing to supervise a part-time registered
representative with a view to preventing violations of the
securities laws. The registered representative operated the
adviser that provided the services described above.
Attached is a copy of the SEC's Orders against the adviser
and broker-dealer.
Amy B. Rosenblum
Assistant General Counsel
Attachment