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, crowdfunding enables entrepreneurs to pitch their businesses to large pools of potential investors. But when I mentioned crowdfunding to my attorney, he said it would be virtually impossible for me to do because the SEC prohibits private business owners from soliciting funds from individual investors.

20 Questions Directors Should Ask about Compliance Committees by Tom Fox

What are some of the questions that the Board of Directors should be asking? We posit that a large public company should have Compliance Sub-Committee of Board members. We list 20 questions below which reflect the oversight role of directors which includes asking senior management and themselves. The questions are not intended to be an exact checklist, but rather a way to provide insight and stimulate discussion on the topic of compliance. The questions provide directors with a basis for critically assessing the answers they get and digging deeper as necessary.

California Extends IA Exemption for Hedge Fund Managers in Hedge Fund Law Blog

California currently has an exemption from the registration requirements for certain fund managers with more than $25M of AUM (Rule 260.204.9).  Back in March California requested input from the investment management community on how they might change the registration requirements when the SEC finalizes its IA registration rules as a result of the Dodd-Frank act.  At that time it was expected that the SEC would finalize its IA registration rules in time for managers to register before the July 21, 2011 registration deadline.  However, the SEC subsequently indicated that it would likely extend the registration deadline until the first quarter of 2012.  From this story by IA Watch, it looks like the Division of Investment Management is moving closer to officially moving the registration deadline to next year.

Whistleblower skirmish: Battling the SEC over how to rat out corp. fraud by Kaja Whitehouse in the New York Post

The US Chamber of Commerce is leading the fight for one side, demanding Schapiro force corporate whistleblowers to report wrongdoing first to executives at their workplace. In the opposite corner is a group of lawyers representing whistleblowers, who have formed the National Whistleblowers Center. They are demanding that Schapiro allow corporate whistleblowers to snitch wherever they feel is best — so they won’t be scared of reporting wrongdoing.

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