According to “Katy’s Corner,” Janet Cowell has
•No record of investment licenses or professional certifications;
Investment adviser Registration Section 202(a)(11) of the Investment Advisers Act of 1940 (15 U.S.C. § 80b-2(a)(11)), which is a key federal law, defines “investment adviser” in part as “any person who, for compensation, engages in the business of advising others, either directly or through publications or writings, as to the value of securities or as to the advisability of investing in, purchasing, or selling securities, or who, for compensation and as part of a regular business, issues or promulgates analyses or reports concerning securities.”
Three essential elements that characterize an investment adviser are: ·
1. Provides advice or analysis on securities either by making direct or indirect recommendations to clients or by providing research or opinions on securities or securities markets. ·
2. Receives compensation in any form for the advice provided. ·
3. Engages in a regular business of providing advice on securities. Each state has its own securities statute and regulations governing the operation and registration of investment advisers. It is important to note that while most states have a deminimus exemption for advisers having only a few clients in the state, some states count solicitations toward that minimum. The IA firm holds the registration/license. The IAR is an individual who performs services on behalf of the registered/licensed IA. Some states include within the definition of an IAR a person (often called a solicitor) who regularly refers customers to an IA and who receives compensation for those referrals. Other states may have modified licensing requirements for solicitors, and may require separate registration for solicitors, or other regulatory requirements.
While the requirements for registration and maintaining the registration vary from state to state, there are some general principles which apply in all states. Each state requires that IAs who do business in their state:
- · State advisers to register or become licensed.
- · Federal covered advisers to make a notice filing of their Form ADV.
- · A passing score on a competency examination for each individual acting as an investment adviser or investment adviser representative.
- · Payment of a fee for processing the applications.
- · Certain disclosures to the securities agency and/or the public.
- · Registration of branch offices of the adviser.
- · A bond or minimum net capital.
A notice filing for a federal covered adviser is usually made by:
- · Filing a complete copy of its Form ADV as filed with the US SEC.
- · Filing a Form U-4 application for each investment adviser representative who will provide services on behalf of the investment adviser.
- · Payment of any required notice filing fees.
The State and the SEC require electronic filing via the Investment Adviser Registration Depository (IARD). Firms must register with the IARD prior to making a filing. Complete information regarding the IARD system is available at http://www.iard.com/GetStarted.asp
Investment advisers and investment adviser representatives must renew their registration/license annually. In many states, the term is from January 1 to December 31 of a given year. However, some states have different renewal dates. Check with the state securities office in each state where you intend to do business. If an adviser becomes registered/licensed in the middle of a year, the fee is usually not prorated.
Today, the renewal process for investment advisers is handled by IARD
An adviser is required generally to maintain and keep current the records listed below. Additional recordkeeping requirements may also be set by the home state of the adviser. It will be necessary to check with the home state regulator.
Records Required of All Advisers:
- · Receipts and Disbursements Journals
- · General Ledger
- · Order Memoranda
- · Bank Records
- · Bills and Statements
- · Financial Statements
- · Written Communications and Agreements (including electronic transmissions)
- · List of Discretionary Accounts
- · Advertising
- · Personal Transactions of Representatives and Principals
- · Client Records:
- · Powers Granted by Clients
- · Disclosure Statements
- · Solicitors’ Disclosure Statements
- · Performance Claims
- · Customer Information Forms and Suitability Information
- · Written Supervisory Procedures
Records Required of Advisers Who Have Custody of Client Assets:
- · Journals of Securities Transactions and Movements
- · Separate Client Ledgers
- · Copies of Confirmations
- · Record by Security Showing Each Client’s Interest and Location Thereof
Records Required of Advisers That Manage Client Assets:
(These records are required to be maintained in an easily accessible place for a period of five years from the end of the fiscal year during which the last entry was made and, for the first two years, the records must be maintained in the adviser’s principal office.)
- · Client Purchases and Sales History
- · Current Client Securities Position
Cowell’s resume from Katy’s Corner shows no investment licenses.
The SEC can also fine Elaine Marshall, who is responsible for allowing Cowell to continue acting as an investment adviser for unlawful and gross mismanagement of over $70 billion!
Department of the Secretary of State
2 South Salisbury Street
Raleigh, NC 27601
David S. Massey
Deputy Securities Administrator
(919) 807-2183 (Fax)