Seite - 102 - in Austrian Law Journal, Band 1/2015

ALJ 1/2015 Brian Carroll 102 Advisers.”16 Although this article focuses on discerning investment adviser status under the first category of investment adviser, Publication Advisers and Report Advisers marginally come into play when discussing investment adviser status. This definition of an investment adviser is limited by eight exceptions under § 202(a)(11)(A)-(G).17 Only those exceptions that add significantly to our discussion of investment adviser status are noted. Two categories of exceptions stand out. First, there are two “solely incidental” exceptions, which play a recurring role. Section 202(a)(11)(B) excepts from the definition of an investment adviser lawyers, accountants, engineers and teachers who perform investment adviser services that are “solely incidental” to their professional practice.18 Similarly, § 202(a)(11)(C) excepts a bro- ker or dealer if it performs investment adviser services that are “solely incidental” to their broker or dealer business and does not receive any “special compensation” for these investment adviser services.19 The second exception category authorizes the Commission to create exceptions. Under § 202(a)(11)(H), the Commission is authorized to promulgate rules and regulations or issue orders excluding from the definition of an investment adviser “other persons not within the intent” 20 of the § 202(a)(11). 16 For examples of what is referred to in this article as a “Report Adviser,” see, e.g., Abrahamson v. Fleschner, 568 F.2d 860, 862, cert. denied, 436 U.S. 905 (1978) (interpreting the application of § 202(a)(11) to investment adviser that, inter alia, issued reports); Sec. & Exch. Comm’n v. Saltzman, 127 F. Supp. 2d 660 (E.D. Pa. 2000) (same); Sec. & Exch. Comm’n v. Smith, 1995 U.S. Dist. LEXIS 22352 (E.D. Mich. Jan. 6, 1995) (same). But see Pozez v. Ethanol Capital Management, LLC, 2009 WL 2176574 (D. Arz. 2009) (reports did not adequately concern securities). 17 See § 202(a)(11)(A-G). In summary and without noting limitations, these exceptions generally cover certain (A) banks and bank holding companies unless it provides as defined under the Bank Holding Company Act of 1956; (B) professional offering investment advice that is “solely incidental” to their professional services; (C) broker and dealers offering investment adviser this is “solely incidental” to brokerage services and without receiving special compensation for the investment advice; (D) certain “bona fide” newspapers and other types of publications; (E) persons advising exclusively on securities designated by the Secretary of the Treasury pursuant to § 3(a)(12) of the Securities Exchange Act; (F) nationally recognized statistical rating organization, as defined under § 3(a)(62) of the Securities Exchange Act; (G) advisers offering family office services, as defined by the Commission; and (H) advisers excluded by Commission rule, regulation or order. Except as noted in the article text, discussions of these exceptions are beyond the scope of this article. 18 See § 202(a)(11)(B), 15 U.S.C. § 80b-2(a)(11)(B); Crabtree Invs., Inc. v. Aztec Enters., Inc., 479 F. Supp. 448, 450 (M.D. La. 1979) (investment advice provided by certified public accountant “incidental”); S & D Trading Academy, LLC v. AAFIS, Inc., 2008 WL 2325167 (S.D. Tex. 2008) (discussing teacher exception to definition of investment adviser under Texas Securities Act, the language of which is identical to § 202(a)(11)(B)). See generally Brian Carroll, SEC Ju- risdiction over Investment Advice, 192 J. ACCOUNTANCY, Aug. 2001, at 32. 19 See § 202(a)(11)(C), 15 U.S.C. § 80b-2(a)(11)(C); Thomas v. Metro. Life Ins. Co., 631 F.3d 1153 (10th Cir. 2011) (anal- ysis of “solely incidental” and “special compensation” language of § 202(a)(11)(C)); Fin. Planning Ass’n v. Sec. & Exch. Comm’n, 482 F.3d 481 (D.C. Cir. 2007) (vacating Commission rule, Certain Broker-Dealers Deemed Not to be Investment Advisers, 70 Fed. Reg. 20,424 (Apr. 19, 2005), permitting broker-dealer to receive special compen- sation for investment advice but still maintain exemption from definition of investment adviser); see also Sec & Exch. Comm’n v. Kenton Capital, Ltd., 69 F. Supp. 2d 1 (D.D.C. 1998) (broker-dealer received special compensa- tion for providing non-incidental investment advice); Sec. & Exch. Comm’n v. Rauscher Pierce, Refsnes, Inc., 17 F. Supp. 2d 985 (D. Ariz. 1998) (broker-dealer investment advice not “solely incidental”); Polera v. Altorfer, Podesta, Woolard and Co., 503 F. Supp. 116 (N.D. Ill. 1980) (broker-dealer investment advice “solely incidental”). 20 Section 202(a)(11)(H), 15 U.S.C. § 80b-2(a)(11)(H). See Atwater v. Nat’l Football League Players Ass’n, 2007 WL 1020848 (N.D. Ga. 2007). (Commission exemption under § 202(a)(11)(H), formerly § 202(a)(11)(G), noted).