Money Managers -- investment advisers, broker-dealers and the like -- serve an important role not only in the financial system of the United States, but also the financial operations of institutions and the financial lives of individuals. Those managers today advise institutional and individual clients (including mutual funds) having aggregate assets under management well in excess of $70 trillion globally. This course focuses on the essential legal obligations placed on money managers in providing services to their clients and prospective clients: complying with a broad variety of fiduciary duties; meeting the terms and conditions of rules adopted by regulatory agencies; and avoiding engaging in fraudulent activities.
The course begins with consideration of the concept of a fiduciary and the manner in which the concept has become imbedded in the federal securities laws applicable to money managers. The course then turns its attention to the concept of fraud as defined in, and interpreted under, those securities laws and how the concept has been employed and expanded by the Securities and Exchange Commission (“SEC”) to set standards for money managers registered under the Investment Advisers Act of 1940 (the “Advisers Act”). The Advisers Act, the Investment Company Act of 1940 (the “1940 Act”) and portions of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”) will be the principal statutory provisions around which the course will be centered. A number of classes during the semester will be devoted to detailed study of rules adopted by the SEC under the Advisers Act and the 1940 Act and by the Department of Labor under ERISA. At least three class sessions during the semester will be practical in nature, designed to enable students to assume the roles of legal practitioners advising money management firms facing various factual situations involving clients of those firms.