The SEC recently showed that it can and will impose the expanded rules provided by the Dodd-Frank Act to actions that occurred before the statute became effective. The case in question involves a hedge fund manager alleged to have engaged in various fraudulent activities. The SEC imposed a permanent bar against the advisor prohibiting him from associating with a broker-dealer, municipal securities dealer, NSRSO, etc. even though the law prior to Dodd-Frank only permitted a ban from associating with an investment adviser. The SEC stated this action was necessary to protect the public from future harm.
Since the SEC has no issue applying current rules to past deeds, we must all be aware and determine how this view might affect our firms.
To read the full enforcement action, please click here