Perspective - SDDco Group

December 4, 2018  |  Vol 3. Edition 1

Dear SDDco Clients and Colleagues: Our SDDco Perspective includes industry news, guidance, regulatory rule updates, deadlines, and other timely matters impacting brokers, advisors, fintech firms, taxpayers, investors, and their service professionals. The SDDco Perspective is made available on our website monthly at

Gary Fox

“Reports of my death are greatly exaggerated.” Originally attributed to Mark Twain, the expression now appears to be an appropriate response to an article entitled “The Fiduciary Rule Is Dead. What’s an Investor to Do Now?” published by the Wall Street Journal on September 9, 2018.

The Department of Labor announced in late October that it is reviewing its options following the 5th Circuit opinion and has published on its regulatory timeline that a final DOL rule will be issued in September of 2019. In other words, firms operating under the assumption that the Fiduciary Rule was gone for good, and was being replaced by a similar, easier regulation from the SEC will need to reconsider that viewpoint.

The DOL’s timeline, coincidentally (or not), happens to match the timeline currently published by the Securities and Exchange Commission for final word on the new Regulation Best Interest, i.e., Reg BI. Many industry watchers believe the timing is intentional. The conventional wisdom currently supports that coordination between the two agencies will result in a better outcome for the industry, though this is by no means certain. In the interim, DOL enforcement actions have not shown any signs of waning, despite the current status of the Fiduciary Rule. We here at SDDco Group recommend the following two articles as excellent primers on the revised DOL Fiduciary Rule, coordination with the SEC and Reg BI, as well as the state of DOL and SEC enforcement actions.

Read more:



Bryon Lyons
CEO, SDDco Brokerage Advisors LLC

SEC Sanctions Paragon and CarrierEQ, Provides ICO Model for Compliance

On Friday November 16, 2018, the SEC announced settlements with two cryptocurrency startups, which conducted unregistered offerings of digital tokens in 2017. In announcing the settlement of these two cases, out of more than 100 active SEC investigations of unregistered ICOs, SEC Co-Director of Enforcement Steven Peikin observed, “These orders provide a model for companies that have issued tokens in ICOs and seek to comply with the federal securities laws.” Read more here and here

New Opportunity Zone Rules Get Developers and Fund Managers Really Excited

Opportunity Zone investments could be “the biggest thing to hit the real-estate world in perhaps the past 30 or even more years,” says Bruce Stachenfeld of law firm Duval & Stachenfeld. Treasury Secretary Steven Mnuchin predicted the zones will attract over $100 billion in private capital. Family offices and individual investors with built-up gains in stocks, property, and/or businesses that are ready to be sold are some of the targets of fund sponsors.

In October 2018, the U.S. Department of the Treasury issued rules governing the December 22, 2017 Tax Cuts and Jobs Act, which created a new section of the Tax Code (26 U.S. Code § 1400Z) that provides significant tax incentives for investors in an “Opportunity Fund” that invests at least 90% of its capital in qualified “Opportunity Zone” projects in the United States.  Read more:

WSJ November 17, 2018

WSJ November 18, 2018

Fundrise: Opportunity Zone Investment Guide

IRS: Investing in Qualified Opportunity Finds 


Erin Furtado
Head of Marketing

Nearly 70 Percent of SMBs Experience Cyber Attacks

A recent 2018 business study concluded that small to medium sized businesses face the same cybersecurity risks as larger companies. Only 28% of companies rate their cyber armor as “highly effective”. Don’t fall into this category, you are at risk! Small to medium sized businesses are actually a target for cyber attackers due to a failure to use strong passwords, two-factor authentication, and unique passwords for every website, application, and system.  Read more >

The Biggest Cyber Threats to Watch Out for in 2019

Cryptojacking, software subversion and a rise in attacks to the cryptocurrency ecosystem, OH MY! These are all the primary threats that security firms are urging businesses to watch out for in 2019. What can you do to safeguard your business from these threats? You should heighten your cyber policy by following the incident disclosure expectations GDPR and SEC have recently implemented, as well as some market trends, while a divided congress works on ways to mitigate cyber-attacks on their end. Read more >


  • Become compliant with all state and federal requirements including FINRA, NYDFS, SEC, etc.
  • Infrastructure Testing including Penetration Testing
  • Customized and Tested Policies and Procedures
  • Fully Managed Incident Response Coverage
  • Data Security Training
  • Vendor Due Diligence
  • Risk Assessments

Speak with an SDDco consultant about how we can help you navigate the nuances of armoring your firm through SDDco Cyber.


Ross Marlin
Associate Director

SEC Charges Advisory Firm With Due Diligence and Monitoring Failures

The SEC fined an investment adviser $400,000 and censured its CEO for failing to allocate sufficient resources to compliance, thereby contributing to the firm’s compliance violations and failure to prevent an offering fraud.  Read more >  

To learn more about how SDDco can help bolster your firm’s compliance program, click here.


Bob Fortino
Co-Managing Partner

New Expensing and Bonus Depreciation Rules for Small Businesses

The Tax Cut and Jobs Act (“TCJA”) has increased the amount a small business can expense as Section179 property, in the year property is placed in service, from $500,000 to $1,000,000. This increase is effective for taxable years beginning after December 31, 2017. The phase out limit for this benefit was raised to $2,500,000. Section 179 property placed in service in excess of $2,500,00 will reduce the benefit dollar for dollar. Section 179 property is business property, such as business equipment, office equipment, and certain qualified real property. In addition, the TCJA increased the first year bonus depreciation from 50% to 100% on depreciable business assets with a recovery period of 20 years or less. Read more >


Casey Muller
Senior Contract Administrator

Is a US Equivalent of the EU’s GDPR on the Horizon?

In response to the demand for data protection and in the wake of EU’s GDPR, individual US states have shown initiative passing privacy laws (e.g. California, effective January 2020). However, the concept of several state-specific regulations seems far from optimal for interstate commerce. Many familiar with the topic believe a uniform yet flexible Federal legislation, one applicable between states and industries, is not only inevitable but necessary for effective and sustainable US data privacy laws. The Department of Commerce just completed its first step in that direction.  Read more >


Keep a look out for us at 2019 LINC:


San Diego, CA | February 6-8, 2019

Last day to register for conference: Friday, Dec 7

Grand Hyatt
1 Market Place
San Diego, CA, 92101
Tel: 619-232-1234

SDDco Group makes this general information available for educational purposes only, the contents of which were not originated from SDDco. SDDco is not affiliated with any of the publishing persons or entities of the articles herein. The information provided should not be construed as legal advice. This email may constitute an advertisement under U.S. law. | | (212) 751.4422