Compliance Bits and Pieces for March 23

Photo by Carol Highsmith, April 2007.

These are some compliance related stories that recently caught my attention.

No, You Can’t Tase Compliance by Scott Greenfield

It is undisputed that defendant did not threaten, fight with, or physically resist the officers at any time; rather, he simply refused to open his mouth to allow the officers to obtain a buccal swab. . . We cannot agree with the suppression court that, after 10 to 15 minutes of asking a suspect to comply with a court-ordered buccal swab of which the suspect had no prior knowledge, it is reasonable for the police to tase a nonviolent, handcuffed, and secured defendant in order to force the suspect into submission.

A Good Meal, A Good Time And A Good Securities Offering? by Keith Paul Bishop in California Corporate and Securities Law

A California administrative decision illustrates how a simple dinner party can get suddenly veer from a purely social gathering to arguably a public offering of securities. It seems that the party began innocently enough. When a woman moved into a rural residential community, the local women organized a dinner party to welcome the new arrival. … It turns out, however, that the new neighbor had plans to build an alcohol and drug rehabilitation facility in the community. Thus, she saw this dinner party as more than an opportunity to meet her neighbors; she saw it as an opportunity to win support for her project. In fact, she brought a copy of a prospectus for her project.

Defined Benefit Plans: Recent Developments Highlight Challenges of Hedge Fund and Private Equity Investing (.pdf) by the Government Accountability Office

In order to assess the extent to which pension plans have realized desired benefits from investing in hedge funds and private equity, and actions they may have taken in response to recent experiences, particularly given ongoing market volatility, you asked us to examine the following questions:

  • What is known about the experiences of defined benefit pension plans with investments in hedge funds and private equity, including recent lessons learned?
  • How have plan sponsors responded to lessons learned from recent experiences with such alternative investments?
  • What steps have federal agencies and other entities taken to help plan sponsors make and manage investments in such alternative assets, and what additional steps might be warranted?

On Wall St., Keeping a Tight Rein on Twitter by William Alden in DealBook

This is how Wall Street firms are tiptoeing into the fast-paced world of social media. Firms like Morgan Stanley must tightly monitor communications to ensure that they are in compliance with securities regulations. As a result, they generally block employees from using social media sites like Twitter or even checking personal e-mail accounts at work. Indeed, the banks underwriting the gigantic Facebook I.P.O. bar their employees from using the social networking site.

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