Category: Board of Directors
SEC Chief Accountant Wesley Bricker spoke before the Baruch College Financial Reporting Conference on May 3, 2018. As in recent presentations, Mr. Bricker commenced these remarks by addressing briefly several hot button corporate accounting and disclosure obligations. This discussion included specific mention of the proper application of recently operative revenue recognition rules and the pending adoption of lease and credit loss standards, which will take effect in 2019 and 2020, respectively. Mr. Bricker then reserved a significant portion of his remaining commentary to emphasize the importance and responsibility of one particular group of professionals in advancing the quality of financial reporting: audit committee members.
Mr. Bricker’s initial reference to audit committees arose in the context of non-GAAP financial measures which, as he has stated previously, should be used as a supplement but not a substitute for financial reporting in conformity with … Read More »
SEC Charges Mutual Fund Board Members and Investment Adviser with Violations of Section 15(c) For Deficient Advisory Contract Approval Process
On June 17, 2015, the SEC charged Commonwealth Capital Management (“CCM”), an investment adviser to various mutual funds within World Funds Trust (“WFT”) and World Funds, Inc. (“WFI”), for violating Section 15(c) of the Investment Company Act by providing incomplete and inaccurate information to two mutual fund boards, and CCM’s majority owner John Pasco with causing the violations. It further charged three former trustees of the WFT board, J. Gordon McKinley III, Robert R. Burke, and Franklin A. Trice III, with Section 15(c) violations because they did not follow up with CCM to obtain the requested information that was never provided. Instead, they approved CCM’s advisory contracts for the WFT Funds without the reasonably necessary information needed to evaluate the terms of the contracts.
Section 15(c) requires that a majority of the fund’s independent directors approve the terms of any advisory … Read More »