One of the major tactics of hedge funds is to “arbitrage reality”, operating with a better understanding of a company and its stock price than other participants in the market. In a legitimate operation, that means lots of research. On the wrong side it means getting inside information about a company’s earnings, upcoming deals, and [...]
Archive | June, 2011
Nobody Expects The Spanish Inquisition
The most dangerous parts of managing risk are the risks you don’t expect. Looking back at my old four-box analysis, there are really two types of unexpected risks, the risk that you know that you don’t know and the risk that you don’t know that you don’t know. In the first case you know there [...]
What do Wyoming, New York, and Minnesota Have in Common?
They don’t examine investment advisers. Wyoming has long been on this list because it does not have a law regulating investment advisers. In Item 2 of Form ADV there was a box to check if your principal office and place of business was Wyoming. That kept you in SEC registration. The importance of whether a [...]
Will Private Equity Fund Managers Register or be Exempt?
The SEC extended the deadline for private fund managers to register with the Securities and Exchange Commission as investment advisers from July 21, 2011 to March 30, 2012. That’s a long enough period of time for legislation to intervene and grant a new exemption for private equity fund managers. Dodd-Frank has a new exemption for [...]
Compliance Bits and Pieces for June 24
These are some recent compliance-related stories that caught my eye: What ‘Inside Job’ got wrong by Ezra Klein in the Washington Post And ultimately, that’s what makes the financial crisis so scary. The complexity of the system far exceeded the capacity of the participants, experts and watchdogs. Even after the crisis happened, it was devilishly [...]
SEC Extends Deadline and Adopts Rules for Advisers and Private Funds
At an open meeting on June 22, the Securities and Exchange Commission adopted new rules under the Investment Advisers Act of 1940 aimed at investment advisers, private fund managers, venture capital funds, and family offices. Based on the statements at the meeting, there will be three new rules would: Delay Registration Deadline and a New [...]
Sometimes You Get Stuck and Can’t Get Out
Finally, the SEC is going to take some action today on the regulation of investment advisers, venture capital funds, and private fund managers. For years, they’ve been trying to get regulatory control of private funds. Now they are going to get it. Do they really want it? Sometimes what you want to do is not [...]
Enterprise 2.0 – Regulatory and Compliance Concerns
I’m once again speaking at the Enterprise 2.0 Conference. Social Media & Social Networking: Some Cautionary Tales (Location: Room 312) Social media (Twitter, LinkedIn) and enterprise social networking solutions (profiles, activity streams, social analytics) can deliver compelling business value. However, benefits do not come without risks. This panel discussion with experts and practitioners will provide [...]
Be Mindful of Compliance Costs
That story is title does not come from me; it’s a quote from Commissioner Troy A. Paredes of the Securities and Exchange Commission. We cannot simply focus on the costs and benefits of a single rule change on a stand-alone basis. It is the totality of the regulatory infrastructure that impacts the private sector. As [...]
Compliance Bits and Pieces for June 17
These are some compliance-related stories that caught my attention: Still Writing, Regulators Delay Rules by Louise Story in the New York Times Regulators overseeing financial reform are delaying many of the planned changes in the immense market for complex securities known as derivatives because they are running drastically behind schedule in writing their new rules. [...]
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