Most private funds rely on a Rule 506 exemption under Regulation D to sell their limited partnership interests to investors. A new SEC rule amending Rule 506 should catch the eye of private fund compliance officers. The concept it fairly straight-forward: felons should not be allowed to take advantage of the private offering exemptions. Dodd-Frank [...]
Archive | May, 2011
Compliance Bits and Pieces for May 27
Here are some compliance-related stories that recently caught my eye: Gold is Not an Investment by Carl Richards in the NY TImes.com’s Bucks Gold is not an investment. It’s a speculation. Investments are made by evaluating underlying value. Speculative bets are made by looking at the price of something and simply hoping the price goes [...]
The New SEC Whistleblower Rule
In a blow to the efforts of internal compliance, the SEC will let corporate whistle-blowers collect a percentage of penalties when they report financial wrongdoing, even when they bypass companies’ internal complaint systems. “For an agency with limited resources like the SEC, it is critical to be able to leverage the resources of people who [...]
Learning Lessons From Gaffken & Barriger
I read through an occasional SEC complaint looking for lessons to be learned. Those involving real estate funds particularly catch my eye. I found the complaint against Lloyd V. Barriger (.pdf) and his management of his Gaffken & Barriger Fund to be full of lessons. I don’t have any independent facts and am accepting the [...]
Have You Set Up Your IARD Account?
With the impending deadline for filing Form ADV to register as an investment adviser, you need to jump through some hoops before you can do the filing. First step is visiting the Investment Adviser Registration Depository. Form ADV needs to be filed electronically and this is the electronic mailbox. But first you need an account. [...]
Time for the SEC to Extend a Deadline
Dodd-Frank set a July 21 deadline for changes to the Investment Advisers Act in Title IV: The Private Fund Investment Advisers Registration Act. This included the expiration of the private adviser exemption from registration under the Investment Advisers Act, the addition of an new exemption for “venture capital fund advisers” and the increase in the [...]
Compliance Bits and Pieces
Here are some recent compliance related stories that caught my eye. My Attorney Just Shattered My Crowdfunding Dreams by Christopher Hytry Derrington and Charles Hertlein in the Huffington Post In February 2011, I announced on the Huffington Post that my company was going to try to raise investment capital via crowdfunding. Using online social networks, [...]
Controls on Political Contributions
In the face of some pay-to-play scandals involving investment advisers and government sponsored investment fund officials, the Securities and Exchange Commission slapped restrictions on the ability of investment advisers and fund managers to make political contributions. Rule 206(4)-5 prohibits an investment manager or fund manager from collecting fees for two years if the firm or [...]
The SEC Uses a Shiny New Tool
Earlier this year the Securities and Exchange Commission announced a new initiative encouraging cooperation. They wanted to start using Cooperation Agreements, Deferred Prosecution Agreements, and Non-prosecution Agreements. They finally got use one of their shiny new tools. The SEC announced that Tenaris S.A. entered into a Deferred Prosecution Agreement. The SEC alleged that Tenaris, a [...]
Will Private Equity be Exempted from Registration?
In earlier versions of Dodd-Frank, when it was being formulated in the House committee, there was an exemption for private equity fund managers from registration under the Investment Advisers Act. It also had an exemption for venture capital fund managers. Only the venture capital exemption managed to survive. Of the many attempts to cut back [...]
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