You deserve to work with a law firm that offers integrity, reliability and a personal commitment to finding the right solutions for the challenges and opportunities you face every day. Since 1933, Stark & Stark has developed innovative legal solutions to meet our clients’ needs. More than 100 attorneys, over 30 practice areas, and a philosophy of putting the law to work for our clients is the basis from which we build and maintain our practice.

On December 22, 2020, the U.S. Securities and Exchange Commission adopted amendments to the rules under the Investment Advisers Act of 1940 relating to advertisements. A copy of the adopting release is available here. This alert is to provide you with a high-level overview of the amendments and the new rule. Firms will have roughly 18 months to get into compliance with the new rules and we will be available to assist them with (i) updating their policies and procedures to comply with the new marketing rules, (ii) reviewing any collateral advertisements, (iii) assisting them with reviewing their solicitation arrangements, and (iv) addressing any questions they may have relating to testimonials, endorsements, third-party ratings, recordkeeping, or their Form ADV.

Continue Reading SEC Amends Advertising and Solicitation Rules: Numerous changes to start digesting and implementing.

Unfortunately bad actors are leveraging the current Coronavirus epidemic for malicious intent. It has escalated so quickly that the United States Secret Service issued a press release.

As you might imagine, the phishing attacks exploit our concerns regarding COVID-19.

One widespread campaign includes a poisoned PDF document labelled “CoronaVirusSafetyMeasures_pdf“ which, if opened, can give full administrative control of your computer to the attacker.


Continue Reading Possible Security Risks of Working from Home

California Assembly Bill 5 (the “Bill”) was passed in Senate on September 9, 2019 after passing the Assembly back in May. According to reporting by the New York Times, it is expected that California Governor, Gavin Newsom, will sign the bill.

The Bill changes the status quo on the classification of employees and independent contractors. As the preamble to the Bill makes clear, California courts currently follow the common law rules for determining whether an employer-employee relationship exists or whether a person is an independent contractor. That test has numerous parts, but one of the important elements for a person to be considered an independent contractor is that the person must be free to control the performance of their work.


Continue Reading California Assembly Bill 5 and the (Non-)Impact on the Financial Services Industry

On March 20, 2019, the Massachusetts Securities Division, Enforcement Section (the “Division”) filed a complaint against an investment adviser located in Massachusetts. The complaint alleged that the firm’s two owners and financial professionals “gambled away millions of dollars in client assets through high risk bets on the oil and gas market.”[1] This author vehemently disagrees with the Division’s complaint and the message it sends to the industry.

Continue Reading Massachusetts Securities Division Changes the Law Applicable to Investment Advisers Overnight

My name is Max Schatzow and I am an attorney with the law firm of Stark & Stark in Lawrenceville, New Jersey. When we first saw the press release issued by Governor Murphy back in September announcing his intentions, we knew that we wanted to participate in this process, because the Investment Management practice group at Stark & Stark represents numerous broker-dealers and countless investment advisers registered with the United States Securities and Exchange Commission and the New Jersey Bureau of Securities on regulatory and compliance matters.

Our clients are extremely varied and range from those providing investment advice to private investment funds and registered investment companies to retail individuals. However, our most common client is an individual or group of individuals who have broken away from a larger financial institution, such as Morgan Stanley or Merrill Lynch to start their own boutique investment advisory firm. We then help those firms address their legal and compliance needs and serve as outside counsel and compliance officers as they grow their business.


Continue Reading Statement of Max Schatzow on behalf of Clients before the New Jersey Bureau of Securities

In April 2018, California’s Department of Business Oversight (“DBO”) announced that, beginning in October, it will begin conducting an online questionnaire-based examination of certain investment advisers registered with the DBO. This digital examination will be in addition to the DBO’s onsite examination program. The DBO recently sent registered investment advisers a reminder of this pending initiative. It is unclear from the DBO’s communications whether this online examination will be required for every investment adviser on an annual basis or only after an investment adviser receives an examination request.

Continue Reading California to Conduct Written Electronic Examination of State-Registered Investment Advisers

The United States Securities and Exchange Commission’s (SEC) Office of Compliance Inspections and Examinations (OCIE) are now conducting examinations of investment advisers concerning “crypto-assets,” which they define to include crypto-currency, initial coin offerings, distributed ledger technology, blockchain or any related products, and pooled investment vehicles investing in these assets or technology.

Continue Reading SEC’s Office of Compliance Inspections and Examinations Begins Conducting Targeted Reviews Related to Crypto-Assets

Max Schatzow, Esq., on behalf of Stark & Stark’s Investment Management & Securities Practice Group, submitted a comment letter to the U.S. Securities & Exchange Commission (“SEC”) in response to the SEC’s proposed interpretation of the standard of conduct under the Investment Advisers Act of 1940.

While Stark & Stark largely agreed with the SEC’s proposed interpretation of the standard of conduct, it took issue with its characterization of the duty of care owed by investment advisers. As a general matter, investment advisers owe their clients both a duty of care and a duty of loyalty. Stark & Stark generally agreed with the SEC’s framework surrounding the duty of loyalty. However, the SEC’s proposed interpretation of the duty of care would require “the duty to act and to provide advice that is in the best interest of the client.”


Continue Reading Stark & Stark Investment Management & Securities Practice Group Submits a Comment Letter to the SEC on Recent Rule Proposals

Property managers are often tasked with leading a board or member meeting. These tips will help to keep the meeting on track and productive. Before doing anything else in preparation for the meeting — double check compliance with notice requirements. No notice = no meeting.

Prior Planning Prevents Poor Performance – “The Five ‘P’s”

Preparation is the key to a successful meeting. Determine what type of meeting will be held – that is, a board or member meeting. Create a clear and concise agenda. Remind the board that it is your role to keep the meeting on track. Organization helps to start things off right and keep the meeting on the right track.


Continue Reading Tips to Help Property Managers Effectively Manage Meetings

The recently enacted Radburn statute changes how Community Association elections are conducted in New Jersey, impacting thousands of common interest communities. Community Associations in New Jersey must comply with the Radburn statute and potentially revise their voting systems and update their policies and procedures to comply with relevant law.

A key section in the Radburn statute provides that Community Associations shall not prevent electronic voting where the Community Association Board authorizes electronic voting and an Association member (or voting-eligible tenant) consents to voting electronically. Thus, while the Radburn statute allows electronic voting, implementing an electronic voting system requires the approval and authorization of the Association Board and the individual homeowner’s consent.


Continue Reading Should Your Community Association Be Concerned About Voter Fraud?