These are some compliance related stories that recently caught my attention.
Are Girl Scout Cookies Evil? by Chris MacDonald in the Business Ethics Blog
Well, apparently nothing is safe from criticism. Girl Guide cookies, as it turns out, are under attack for being made with palm oil, a tropical oil the production of which has been blamed for deforestation and for endangering the habitat of orangutans. Girl Scout cookies, in their current form, are apparently evil.
IA Watch is reporting that the Division of Investment Management has formally requested that the Securities and Exchange Commission (SEC) move to next year the deadlines for mid-sized advisers (certain advisers with between $25 million and $100 million in assets under management) to switch to state registration and for private fund advisers with more than $150 million in assets under management to register with the SEC. IA Watch states: “The formal request moves this closer to becoming reality, should the Commission act on it.”
Federal Court Rules that Private Invocation of Dodd-Frank Anti-Retaliation Whistleblower Section Requires Providing Information to SEC in Jim Hamilton’s World of Securities Regulation
In a case of first impression, a federal court ruled that the anti-retaliation whistleblower protection provisions of the Dodd-Frank Act require a prospective whistleblower to show that he either provided the information to the SEC, or that his disclosures fell specific categories listed in the whistleblower provisions. Further, even if the prospective whistleblower did not provide the information directly to the SEC, he could still be covered by Section 922 of Dodd-Frank if he gave information to outside counsel hired by the company’s independent directors to investigate the allegation and who he alleges reported it to the SEC. (Egan v. TradingScreen, Inc. et al., (SD NY), 10 Civ 8202 (LBS), May 4, 2011).
Treasury Clarifies FBAR Regulations for Private Investment Funds in the Harvard Law School Forum on Corporate Governance and Financial Regulation
On March 28, 2011, the Final Regulations, issued by the Financial Crimes Enforcement Network of the U.S. Department of the Treasury (“Treasury”) relating to the filing of Reports of Foreign Bank and Financial Accounts (“FBAR”) became effective. Notably, the Final Regulations do not require ownership interests in, or signing or other authority over, private investment funds, such as hedge funds and private equity funds, to be reported on FBARs, although Treasury will continue to study the issue. The Final Regulations apply to FBARs required to be filed by June 30, 2011 with respect to foreign financial accounts maintained in the calendar year 2010, and for all subsequent years.
The SEC Remains Behind the Times on Social Media by Bruce Carton in Securities Docket
The Securities and Exchange Commission continues to dip its toe into the social media waters, but it’s doing so in such a cautious, disjointed way that it undermines the usefulness of powerful online communication tools.