Model Business Continuity Rule for Investment Advisers

There is no explicit requirement that an adviser or fund manager have a disaster recovery plan. But any manager trying to fund-raise knows that investors will ask about its business continuity plan. The SEC sort of requires SEC registered investment advisers to have a business continuity plan. It’s an easy one to miss in Rule […]

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Weekend Riding: Midnight Boston Marathon Bike Ride

While marathon runners were sleeping in anticipation of the race on Patriots Day, I joined hundreds of cyclists to bike the 26.2 miles in the middle of the night. The Midnight Marathon Bike Ride was back for its seventh year in a row. Short of actually running, I thought it was a great way to […]

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Compliance Bricks and Mortar for April 24

These are some of the compliance-related stories that recently caught my attention. Investors Turn to Big Real-Estate Funds by Peter Grant in the Wall Street Journal Investors are pouring more money into real-estate funds than they have since the property bust, but a few giant fund firms are collecting the lion’s share of the spoils. […]

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Compliance Officer Earns Million-Dollar Whistleblower Award

I’m not sure if this is good news or bad news. In August 2014 the SEC announced a modest whistleblower award of $300,000 to an unnamed company employee “who performed audit and compliance functions and reported wrongdoing to the SEC after the company failed to take action when the employee reported it internally. There is […]

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Compliance Bricks and Mortar for April 17

These are some of the compliance-related stories that recently caught my attention Lions and Tigers and Bears – Certifications, Checklists and Standards by Michael Volkov in Corruption, Crime & Compliance People always look for shortcuts as a weak replacement for efficiency. My concern is that compliance practitioners, vendors, standard setting organizations, and non-profit organizations are […]

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$250 Could Cost a Firm $6.1 Million

A T. Rowe Price vice president made a $250 contribution to the campaign of Scott Walker for governor of Wisconsin in a recall election. That small donation could have cost T. Rowe Price $6.1 million in fees. The SEC’s Rule 206(4)-5 once again shows it scary side to advisers. Fortunately, the Securities and Exchange Commission […]

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Pyramid Scheme or Ponzi Scheme

The Securities and Exchange Commission brought charges against James Evans for engaging in a “Ponzi scheme.” The names of his scheme caught my eye: Cash Flow Bot and Dollar Monster. After digging around, I was puzzled as to what to call the scheme. A Ponzi scheme purports to be a real investment opportunity, but payouts […]

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Invest With Managers Who Eat Their Own Cooking

“It pays to invest with managers who invest in their funds. ” – Russel Kinnel of Morningstar I think this statement will come as no surprise to most investors. Mr. Kinnel did some research on mutual funds to prove the point. It turns out that manager investment is correlated to better performance. Mr. Kinnel was […]

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So It’s a Security, But Maybe the Private Placement Was Okay?

The tale of Western Financial Planning Corporation and Louis Schooler first caught my eye because the Securities and Exchange Commission brought charges against a real estate company. I stuck with the story because Western Financial tried really hard to structure the investments to avoid being considered securities. Even thought it tried really hard, a court […]

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Compliance Bricks and Mortar for April 10

These are some of the compliance-related stories that recently caught my attention. An Eerie Silence by David Kirk in McGuireWood’s The Fraud Board There’s an eerie silence in the world of fraud prosecutions in the UK. A Libor trial is about to start, a FCA land banking prosecution is on trial at Southwark, but with […]

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