Compliance Bricks and Mortar – Blizzard Edition


I’m bunkered down waiting for a blizzard to unleash its wrath on Boston. While my snowblower is waiting for the flakes to fall from the sky, these are the compliance-related stories I’m reading.

‘Without Wheels’: Sometimes Circumstantial Evidence Can Be Quite Powerful by Bruce Carton in Compliance Week

The SEC alleged that Vance learned about the merger when he was asked to help Clear One’s CEO resolve an e-mail issue and saw confidential merger documents, and tipped Wellington. The agency also alleged some extraordinary steps that Vance and Wellington took so that they could have the funds to purchase Clear One shares the very next day:

  • Wellington allegedly obtained a $25,000 loan from an “online peer lending site.”
  • Vance allegedly borrowed $5,285 from his 401(k) retirement account, but also “sold personal computer equipment, and sold his truck to finance his purchases of Clear One shares.”

SEC Charges Husband With Insider Trading Using Wife’s Information by Thomas O. Gordon in SEC Actions

The action centers on the acquisition of National Semiconductor Corporation by Texas Instruments, announced after the close of the market on April 4, 2011. Defendant James Balchan, an IT specialist, is married to a partner in a law firm. One of her partners, called Partner A in the complaint, was a close friend of the general counsel of National Semiconductor. In honor of his friend the general counsel, the Partner A organized a “wine and dine” weekend. Mr. Balchan and his wife were invited.

Carried Interest Explained in Latest PEGCC Whiteboard Video

Judge: “Carried interest is commonly misunderstood in public discourse. Our newest whiteboard video demystifies the topic and answers questions about what carried interest really is, how it works and why it’s appropriately taxed at the capital gains rate.”

Annual Compliance Obligations — What You Need to Know in Pillsbury’s Investment Fund Law Blog

As the new year is upon us, there are some important annual compliance obligations Investment Advisers either registered with the Securities and Exchange Commission (the “SEC”) or with a particular state (“Investment Adviser”) should be aware of.

Two Hedge Fund Managers Charged in Alleged $311 Million Fraud Case by Debbie Cai in’s Corruption Currents

Two hedge fund managers were indicted for alleging defrauding institutional investors and causing total losses of more than $311 million, the U.S. Department of Justice said. …

The charges state between March 2005 and December 2008, Kiener led Bear Stearns entities to believe, under his management, Bear Stearns investment funds would be diversified and independently managed. However, Kiener allegedly funneled Bear Stearns money from K1 through the Oceanus Funds and back to K1, giving the false impression the funds were growing in size and were viable investments.