Michael Rivera Provides Insight on Investment Advisor Conflicts of Interest in Asset Sales

March 26, 2019
ACA Insight

Bass, Berry & Sims attorney Michael Rivera provided insight for an article examining a March 15 Securities Exchange Commission (SEC) settlement in which an investment advisory firm represented both the seller and prospective buyers in an asset sale via an auction. The SEC settlement found that the investment advisor violated its fiduciary duty by failing to disclose the conflict of interest to the parties and taking actions that favored one client (and the advisor) over another client.

The government discovered the problematic transaction during an examination of the investment advisor by the SEC’s Office of Compliance Inspections and Examinations.  As Michael pointed out in the article, investment advisors “need to be on their toes in preparing for examinations by the SEC’s Office of Compliance Inspections and Examinations. They should have a process in place for reviewing such transactions, including these types of auctions. The participation of affiliated parties in an asset sale facilitated by an adviser should generate red flags and prompt additional review.”

The full article, “Keep Fiduciary Duty and Conflicts of Interest in Mind During Transactions,” was published by ACA Insight on March 25, 2019. The full article is available online to subscribers.