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Proposed Anti-Money Laundering Regulations for Investment Advisers and Fund Managers

After years of talking about it, the Financial Crimes Enforcement Network (FinCEN) issued a proposed a rule requiring certain investment advisers to establish anti-money laundering programs and report suspicious activity to FinCEN. The new regulations propose to include investment advisers in the general definition of “financial institution,” which would require them to file Currency Transaction […]

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Management Fee “Waiver” Tax Treatment

The Treasury and the Internal Revenue Service issued proposed regulations relating to disguised payments for services rendered by a partner to a partnership. Private fund managers have used management fee “waiver” mechanisms by reducing the management fee payable to the fund’s manager and the receipt of a corresponding profits interest by the general partner. The […]

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Compliance Bricks and Mortar for August 21

These are some of the compliance-related stories that recently caught my attention. The 5 Most Common AML Compliance Program Deficiencies by Michael Volkov in Corruption, Crime & Compliance In my view, AML programs do not get sufficient support and exposure from top-level management. A compliance failure usually can be traced back to the lack of […]

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Hiring Relatives Could Be An Illegal Bribe

In the case of BNY Mellon, it was an illegal bribe in violation of the Foreign Corrupt Practices Act. The Securities and Exchange Commission charged BNY Mellon that it violated the Foreign Corrupt Practices Act by providing internships to family members of foreign government officials affiliated with a Middle Eastern sovereign wealth fund. The unnamed […]

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Weekend Reading: Rain

Rain rain go away, Come again another day. A simple nursery rhyme for a rainy day. It also happens to be a central theme to Rain: A Natural and Cultural History by Cynthia Barnett. We need rain to survive. Too much, too little and either at the wrong time can be devastating. Ms. Barnett starts […]

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Compliance Bricks and Mortar for August 14

These are some of the compliance-related stories that recently caught my attention. Beware the ‘SEC Impersonator’ Scams Targeting Your Money by Bruce Carton in Compliance Week You might not think that fraudsters impersonating the SEC would be a significant or ongoing problem but the volume of the SEC’s “Investor Alerts” on this topic would seem […]

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On line portals for fundraising

As part of the updates on private placements, the Securities and Exchange Commission granted a no-action letter to Citizen VC, an online venture capital firm. The main question was whether the firm was creating “substantive, pre-existing relationships” with prospective investors through its website. The firm wanted to avoid a result that its offers & sales […]

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Updates on Private Placements

One of the troubling aspects of private placements is trying to draw the line between public advertising for the business and public advertising for selling securities. This aspect is even more apparent for private equity funds and real estate funds that want to tout their deals without jeopardizing their fundraising. The Securities and Exchange Commission […]

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Upcoming Anti-Money Laundering Rules for Private Funds

The Treasury’s Financial Crimes Enforcement Network has been toying with how to impose anti-money laundering standards on private funds and investment advisers for years. There is rumbling from the White House Office of Management and Budget that it approved proposed new regulation. A notice of rulemaking was dropped a few years ago. The thought then […]

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A Win for Compliance Officers

Judy Wolf did a bad thing. During an insider trading investigation she fudged some documents. The Securities and Exchange Commission investigated the insider trading matter and Ms. Wolf’s log of her review. The fudging was discovered. She was fired and the SEC brought an enforcement against her. There is some good news from that bad […]

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