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SEC’s Municipal Advisor Exam Initiative

The Securities and Exchange Commission announced a new examination initiative directed at newly regulated municipal advisors. The examinations are designed to establish a “presence” with the newly regulated municipal advisors. We’ve seen this blueprint before. It looks a lot like the presence exam initiative for newly registered private fund managers and the never before examined […]

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Another Tale of Golf Course Stock Tips Ending Up in a Sand Trap of Insider Trading

The Securities and Exchange Commission brought another insider trading case where the tips were allegedly traded on the golf course. “Country clubs or similar venues may give people a false sense of security that leads them to think they can get away with trading on unlawful stock tips,” said Paul G. Levenson, director of the […]

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The Stability of Prime Money Market Funds

I was critical of the Securities and Exchange Commission’s new rule on money market funds. To me it seemed like it was trying to fix a problem that didn’t exist, and in the process made things more complicated. For criticism to be correct, I need data. After review a paper on the Stability of Prime […]

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Compliance Bricks and Mortar for August 15

GPs look for ‘sweet spot’ on co-investment disclosures by Nicholas Donato in Private Funds Management Part of the SEC’s thinking is that co-investments are being used as marketing tools – so some investor protection is needed to ensure that promises made during fundraising are being fulfilled. Inspectors apparently want to see that every prospective LP […]

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Proposed Regulations on Customer Due Diligence Requirements

The U.S. Treasury Department’s Financial Crimes Enforcement Network has proposed revisions to its customer due diligence rules. Of course, the proposed rule would affect financial institutions that are currently subject to FinCEN’s customer identification program requirement: banks, brokers-dealers, and mutual funds. However, FinCEN suggested that it may be considering expanding these customer due diligence requirements […]

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Lawsuit Against SEC’s Political Contribution Rule

The New York Republican State Committee and the Tennessee Republican Party brought suit against the Securities and Exchange Commission challenging its political contributions rule for investment advisers, Rule 206(4)-5. The complaint seeks an injunction against the enforcement of the rule’s political contribution restrictions on contributions to federal candidates. The first attack on the rule is […]

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FinCEN Emphasizes a Culture of Compliance

The US Financial Crimes Enforcement Network has finally come around to realizing that US financial institutions should promote a culture of compliance. FinCEN does not point to any specific problem, but mere notes that “Shortcomings identified in recent Anti-Money Laundering enforcement actions confirm that the culture of an organization is critical to its compliance.” FinCEN’s […]

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Compliance Bricks and Mortar for August 8

These are some of the compliance-related stories that recently caught my attention. Lawyers as SEC Enforcement Targets, What a Fund Manager Needs to Know by Jay B. Gould in the Investment Fund Law Blog In a move that should place securities lawyers and their clients on notice, Commissioner Kara Stein of the Securities and Exchange […]

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Not Securities Fraud By Reason of Insanity

Some investment fraud schemes sound crazy, but leave just a enough truthful-sounding bits to catch people. But Thomas Lawler’s scheme sounds completely bonkers. He established the Freedom Foundation to offer investors the chance to erase their debts and collect lucrative profits through the purchase of “administrative remedies”. Never heard of profit-making “administrative remedies”? Lawler can […]

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Another Real Estate Ponzi Scheme From 2008

The 2008 financial crisis caused many real estate investment funds to run into trouble. Some fund managers stepped over the line hoping to wait out the turmoil and recover. The Securities and Exchange Commission finalized charges against a fund manager who hoped to divert funds to stay liquid during the turmoil. According to the SEC’s […]

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