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ALJ 1/2015 Brian Carroll 118
one-on-one personal advice with its client. Abrahamson provides legal analysis to support applica-
tion of § 202(a)(11) to a wide range of advisers offering impersonal advice as sub-advisers,132 advis-
ers participating in wrap fee programs,133 and advisers to certain private investment funds134 and
collateralized debt obligations.135
D. The Relationship between Investment Advice and Compensation:
The Intertwined Purposes Issue
The structure of § 202(a)(11) requires that an investment adviser be compensated for investment
advice. In Elliott the court held that discrete fee for investment advice need not be paid in order
to meet the compensation element. The ambiguity created by permitting payment for unspeci-
fied services, however, has forced courts to unravel the intertwined purposes issue: whether
compensation is paid for investment advice, as opposed to some other type of advice or service
that is intertwined with investment advice. In addressing this intertwined purposes issue under
§ 202(a)(11), two different approaches have emerged: the âPurpose of the Partnershipâ and the
âPrimary v. Incidentalâ approaches.
cept of impersonal advice. See, e.g., Rule 203A-3(a)(3)(ii), Definitions, 17 C.F.R. § 275.3A-3(a)(3)(ii) (ââImpersonal in-
vestment adviceâ means investment advisory services provided by means of written material or oral statements
that do not purport to meet the objectives or needs of specific individuals or accounts.â); Rule 204-3(h)(1), Deliv-
ery of Brochures and Brochure Supplement, 17 C.F.R. § 275.4-3(h)(1) (âImpersonal investment advice means in-
vestment advisory services that do not purport to meet the objectives or needs of specific individuals or ac-
counts.â); Rule 206(4)-3(d)(3), Cash Payments for Client Solicitations, 17 C.F.R. § 275.6(4)-3(d)(3) (âImpersonal advi-
sory services means investment advisory services provided solely by means of (i) written materials or oral state-
ments which do not purport to meet the objectives or needs of the specific client [âŠ].â).
132 See Sec. & Exch. Commân v. Treadway, 430 F. Supp. 2d 293 (S.D.N.Y. 2006) (investment adviser as sub-adviser); see
also Sec. & Exch. Commân Press Release, SEC, PIMCO equity Mutual Fundsâ Adviser, Sub-Adviser, and Distributor
Agree to Pay $ 50 Million to Settle Fraud Charges for Undisclosed Market Timing, No. 2004-127 (Sept. 13, 2004).
133 Rule 204-3(h)(5), Delivery of Brochures and Brochure Supplements, 17 C.F.R. § 275.4-3(h)(5), (âWrap fee program
means an advisory program under which a specified fee or fees not based directly upon transactions in a clientâs
account is charged for investment advisory services (which may include portfolio management or advice con-
cerning the selection of other investment advisers) and the execution of client transactions.â); Sec. & Exch.
Commân v. Washington Investment Network, 475 F.3d 392 (D.C. Cir. 2007) (discussing wrap fee program struc-
ture); Geman v. Sec. & Exch. Commân, 334 F.3d 1183, 1185-86 (10th Cir. 2003) (âUnder the wrap fee program, the
firmâs customers paid an âall-inclusiveâ fee calculated as a percentage of the customerâs assets under manage-
ment. In return, the firm provided brokerage, advisory, and custodial services.â); see also Disclosure by Invest-
ment Advisers Regarding Wrap Fee Programs, Investment Advisers Act Release No. 1411 (Apr. 19, 1994), 59 FR
21657 (Apr. 26, 1994) (adopting rule release).
134 See generally Reporting by Investment Advisers to Private Funds and Certain Commodity Pool Operators and
Commodity Trading Advisors on Form PF, Investment Advisers Act Release No. 3308 (Oct. 31, 2011), 76 FR 71128
(Nov. 16, 2011); Exemptions for Advisers to Venture Capital Funds, Private Fund Advisers With Less Than $ 150
Million in Assets Under Management, and Foreign Private Advisers, Investment Advisers Act Release No. 3222
(June 22, 2011), 76 FR 39646 (July 6, 2011); STAFF OF THE DIVISION OF INVESTMENT MANAGEMENT, U.S. SECURITIES & EXCHANGE
COMMISSION, ANNUAL STAFF REPORT RELATING TO THE USE OF DATA COLLECTED FROM PRIVATE FUND SYSTEMIC RISK REPORTS 6 (July
25, 2013) (listing private funds filing with the Commission under Form PF (private fund): hedge funds, private equity
funds, other private funds, real estate funds, securities asset funds, venture capital funds and liquidity funds).
135 The Commission has initiated enforcement actions against investment advisers serving as collateral managers
for collateralized debt obligations. See, e.g., In the Matter of Harding Advisory LLC and Wing F. Chau, Investment
Advisers Act Release No. 3696, 2913 WL 5670841 (Oct. 18, 2013) (order instituting enforcement action alleging
investment adviser serving as collateral manager violated, inter alia, § 206); In the Matter of Delaware Asset Ad-
visers and Wei, Investment Advisers Act Release No. 3434, 104 S.E.C. Docket 651 (July 18, 2012) (settled enforce-
ment action) (investment adviser serving as collateral manager and then portfolio manager found to have violated,
inter alia, § 206(2)); In the Matter of GSCP (NJ), LP, Investment Advisers Act Release No. 3261101, S.E.C. Docket
3325 (Aug. 25, 2011) (settled enforcement action) (investment adviser serving as collateral manager found to
have violated, inter alia, § 206(2)).
zurĂŒck zum
Buch Austrian Law Journal, Band 1/2015"
Austrian Law Journal
Band 1/2015
- Titel
- Austrian Law Journal
- Band
- 1/2015
- Autor
- Karl-Franzens-UniversitÀt Graz
- Herausgeber
- Brigitta Lurger
- Elisabeth Staudegger
- Stefan Storr
- Ort
- Graz
- Datum
- 2015
- Sprache
- deutsch
- Lizenz
- CC BY 4.0
- Abmessungen
- 19.1 x 27.5 cm
- Seiten
- 188
- Schlagwörter
- Recht, Gesetz, Rechtswissenschaft, Jurisprudenz
- Kategorien
- Zeitschriften Austrian Law Journal