Compliance Bits and Pieces – Viva Le Tour

Saturday is the start of Tour de France as most of the world’s best cyclist queue at the starting line in Liège, Belgium. This week’s gathering of compliance stories starts with my story in Wired.com.

A Geek’s Guide to the Tour de France

The 99th edition of the Tour de France starts Saturday in Liège, kicking off three weeks of bicycle racing. Twenty-one teams of nine riders each will have to endure 3,497 kilometers of racing and 25 high mountain passes to reach the finish line on the Champs-Élysées in Paris. It’s an event full of incredible human achievement and endurance. Although it’s one of the largest sporting events in the world, it’s not widely watched in the US. It’s worth your time to watch it. Here is a geek’s guide to the Tour de France to help you get started: …

French Legislation Taxing Non-Resident Investment Funds While Exempting Domestic Funds Violated EU Law on Free Movement of Capital in Jim Hamilton’s World of Securities Regulation

French legislation taxing dividends paid to non-resident collective investment funds at 25 percent, while exempting domestic funds from the tax, violated EU law prohibiting restrictions on the movement of capital between Member States and between Member States and the US, ruled the European Court of Justice. A difference in the tax treatment of dividends according to an investment fund’s place of residence may discourage non-resident funds from investing in French companies and also discourage French investors from buying shares in non-resident funds.

2012 First Half FCPA Enforcement Round-Up: Part I and 2012 First Half FCPA Enforcement Round-Up: Part II from fellow cyclist Tom Fox

The first half of 2012 is reaching to a close and we have had several significant enforcement actions so far this year. So to commemorate all those June Bride and Bride-Grooms out there, including my parents who celebrate their 56th wedding anniversary on June 30, I have put together a couple of posts reviewing my top 6 Foreign Corrupt Practices Act (FCPA) enforcement actions for the first 6 months of 2012. At this point I cannot see any clear trends but there are some key points that provide solid advice for the compliance practitioner going forward.

How Giro Made a Cooler, Faster Helmet by Chuck Squatriglia in Wired.com’s Playbook

When it comes to bicycle helmets, protection is paramount. Everything else — cooling, aerodynamics, light weight — is a compromise. If you want more of one, you’ll surrender a little of the others. But Giro says it has achieved an ideal combination of excellent cooling, low drag and light weight in a bicycle helmet that actually makes you faster.

Bernard Madoff’s Brother Expected to Plead Guilty to Criminal Charges by Chad Bray in WSJ.com’s Law Blog

The brother of convicted Ponzi scheme operator Bernard Madoff will plead guilty to criminal charges Friday, marking the first time a family member has admitted guilt since the massive fraud came to light three-and-a-half years ago.

Pedaling and Charging by Daniel Hamermesh in Freakonomics

People multitask (in economists’ language, “engage in joint production”) in a surprising variety of ways. A neat example appeared in Brussels Airport, with a sign saying “charge your phone and laptop.” But the charging was done by you sitting on a saddle and pedaling a machine that generated the power charging your device.

Wandering Cape Cod bear captured in Boston suburb by Ros Krasny for Reuters

He’s baaack: A male black bear captured on Cape Cod earlier this month, where it was tranquilized and moved to central Massachusetts, showed up again on Tuesday just six miles from downtown Boston.

Compliance Bits and Pieces for June 22

SEC Charges Florida Broker in Astrology-Based Ponzi Scheme

“Persaud preyed on people who trusted him by promising high and steady returns while hiding his unconventional trading strategy,” said Eric I. Bustillo, Director of the SEC’s Miami Regional Office. “When Persaud blatantly lied to investors and hid their losses through a Ponzi scheme, he should have known that an SEC enforcement action was in the stars.”

SEC Builds Money Fund Case by Andrew Ackerman and Kirsten Grind in the Wall Street Journal

Money market mutual funds have been rescued from financial trouble by their parent companies more than 300 times since the 1970s, about 100 more than previously reported, according to a new Securities and Exchange Commission study.

Trial is Not a Crime in America by Scott Greenfield in Simple Justice

[T]hese trials are the ones that test us.  As much as we may revile an alleged crime, and empathize with the purported victims, we have a system by which people accused of crimes are entitled, entitled as in it is their absolute right, to challenge their accusations before we punish them.  The right to a trial isn’t protected for those we favor and denied to those we don’t.  It isn’t limited to those about whom the public thinks a doubt may exist and denied to those we don’t.

Social power and morality by Dan Ariely

The following is taken from the graduation speech of Michael Lewis at Princeton in 2012. In it, he discusses an experiment that explores the relationship between power and morality.

“…… a pair of researchers in the Cal psychology department staged an experiment. They began by grabbing students, as lab rats. Then they broke the students into teams, segregated by sex. Three men, or three women, per team. Then they put these teams of three into a room, and arbitrarily assigned one of the three to act as leader. Then they gave them some complicated moral problem to solve: say what should be done about academic cheating, or how to regulate drinking on campus.

Exactly 30 minutes into the problem-solving the researchers interrupted each group. They entered the room bearing a plate of cookies. Four cookies. The team consisted of three people, but there were these four cookies. Every team member obviously got one cookie, but that left a fourth cookie, just sitting there. It should have been awkward. But it wasn’t. With incredible consistency the person arbitrarily appointed leader of the group grabbed the fourth cookie, and ate it. Not only ate it, but ate it with gusto: lips smacking, mouth open, drool at the corners of their mouths. In the end all that was left of the extra cookie were crumbs on the leader’s shirt.

This leader had performed no special task. He had no special virtue. He’d been chosen at random, 30 minutes earlier. His status was nothing but luck. But it still left him with the sense that the cookie should be his.”

Compliance Bits and Pieces for June 15

Setting the Career Path for Compliance Officers by Matt Kelly in Compliance Week‘s Big Picture blog

I asked these half-dozen conference attendees to sit down with me over breakfast and explain why workforce development is such a challenge for this field. The problem has its roots in two fundamental tensions, they told me. First is the lack of any sweeping, cross-industry standards for compliance professionals. Lawyers need an advanced degree from a law school and a license from the local bar association—but once they have them, the legal tasks most companies face (lawsuits, investigations, document preparation) are largely the same from one company to another. Accountants need a degree in accounting and a license from the state accounting board—but once they have those, the financial reporting tasks they face are largely the same as well.

Court Says 1st Amendment Protects Lawyer’s Blogging by Robert Ambrogi in LawSites

A three-judge panel in Virginia has issued a decision that is important for lawyer-bloggers everywhere. The panel ruled that a lawyer has a First Amendment right to blog about his own cases, at least with regard to information that is already available on the public record. (Needless to say, you should never blog about privileged client information.)

Will The Pilot Know When A Corporation Has “Crost the Bar”? by Keith Paul Bishop in California Corporate & Securities Law Blog

While it is tempting to think that the test is now 2,000 record holders, a more realistic assessment would be to consider the test unchanged unless the issuer is able to keep track of the accredited investor status of its shareholders. This could be a real problem because the status of investors may change or the securities may be transferred to different investors.

ING Bank Forfeits $619 Million In Largest-Ever OFAC Settlement by Samuel Rubenfeld in WSJ.com’s Corruption Currents

The ING Bank NV unit moved billions of dollars from the early 1990s until 2007 through the U.S. financial system on behalf of Cuban, Burmese, Sudanese, Libyan and Iranian clients by stripping out data embedded in payment messages that would have identified the illegal nature of the transactions, according to the settlement agreement signed by the bank and the U.S. Treasury Department.

Flatiron Building (New York City) seen from Empire State Building in September 2004 photographed by Bernd Schubart

Compliance Bits and Pieces for June 8

These are some compliance-related stories that recently caught my attention:

Focus of SRO Hearing Shifts to Regulatory ‘Fatigue,’ SRO Burden for Small Advisors in fi360 blog

At the end of the day, both sides could claim points scored, although it was probably a Pyrrhic victory for SRO opponents. The die is cast for a favorable committee vote sometime this summer. The bill will eventually move to the Senate before gridlock sets in. In the coming weeks, H.R. 4624 will likely be tweaked in the House committee markup, such as adding restraints on costs for small advisers and possibly imposing a cost-benefits analysis on SRO rules. However, the SRO itself will remain intact and faithful to the FINRA governance model. You will not see Ketchum say he can’t live with some amendments. FINRA has plenty of room in the bill for minor concessions. What FINRA can’t afford to lose is market share.

Nasdaq Sets Aside $40 Million to Settle Facebook Claims By MICHAEL J. DE LA MERCED and NATHANIEL POPPER in NYTimes.com’s DealBook

The stock market operator said on Wednesday that it would set aside $13.7 million in cash and pay out the rest in trading rebates to settle disputes by investors arising from technical malfunctions in Facebook’s initial public offering on May 18, the biggest technology I.P.O. ever.

Dirty Dozen: Lawyer Receives Longest-Ever Sentence for Insider Trading by Bruce Carton in Compliance Week’s Enforcement Action

Unlike Raj Rajaratnam, attorney Matthew Kluger was not a billionaire hedge fund founder. Unlike Rajaratnam, Kluger pleaded guilty to the charges of insider trading, sparing the government the expense of a trial. Unlike Rajaratnam, Kluger accepted responsibility for his actions, telling the court he was “terribly, terribly sorry.” Unlike Rajaratnam, Kluger told the court he would “do anything I can to try and regain a modicum of the trust that I destroyed [with] so many people and so many institutions. On Monday of this week, however, U.S. District Judge Katharine Hayden sentenced Kluger to 12 years in prison, one year more than Rajaratnam received and the longest sentence ever handed down for insider trading.

US Hedge Fund Industry Submits White Paper on Shadow Banking to European Commission in Jim Hamilton’s World of Securities Regulation

Hedge funds do not pose systemic risk and regulatory arbitrage risks, said the US hedge fund industry, and thus bank-like regulation of these funds is not necessary. In a white paper on shadow banking submitted to the European Commission, the Managed Funds Association cautioned that bank-like regulation of hedge funds would have the unintended consequence of placing unnecessary restrictions on the activities of hedge funds to the detriment of investors. The white paper detailed a litany of shadow banking characteristics that hedge funds do not share.

New York Court of Appeals: Compliance Officer’s Whistle Blowing Not Protected by Mike Mintz in Martindale.com’s blog

The case, Sullivan v. Harnisch, Slip Op. 03574 ( May 8, 2012) arose out of the termination of a hedge fund officer after he confronted his boss about a series of improper trades. The Court of Appeals had previously recognized an exception to the at-will doctrine in Wieder v. Skala, 80 N.Y. 2d 628 (1992) which involved an attorney who was fired after reporting the unethical conduct of another lawyer at the firm.

SecondMarket weighs in on “verification” of accredited investor status by William Carleton

Quid pro quo for lifting the ban on “general solicitation or general advertising” in Rule 506 offerings, Congress requires companies should “verify” that persons purchasing are, in fact, accredited investors. The thinking is that the current system of self-policing won’t stand up to the onslaught of interest that may follow an offering hyped to the general public. That is, Congress assumes potential purchasers – whipped up into a frenzy on Twitter about a startup likely to be sold next month to Google or Facebook for a billion dollars – will be to prone to lie.



Enterprise Moves to Intrepid
Atop a barge on Wednesday, June 6, 2012, the space shuttle Enterprise was towed on the Hudson River past the Statue of Liberty on its way to the Intrepid Sea, Air and Space Museum, where it will be permanently displayed, .
Image Credit: NASA/Bill Ingalls

Compliance Bits and Pieces for May 18

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

Compliance officers face multiple options for credentials

Certification and continuing education courses abound for compliance professionals, as the demand for their expertise grows and as they seek new jobs and higher wages. Membership groups and educational programs abound to help professionals increase their skills and understanding of the specific regulations in their industries — or to increase their proficiency at spotting risk and ethics lapses in general — while networking with like-minded peers.

Signed Laws & Rules Around the Corner by William Carleton

One way to remind ourselves how much is at stake in JOBS Act rulemaking – even though the JOBS Act itself has already passed – is to remember what happened to the net worth standard under the accredited investor definition of Regulation D, following the passage of Dodd-Frank.

Top 10 Reasons to Avoid Crowdfunding by Andrew Ledbetter in The Venture Alley

In today’s age of social media success stories, there is something superficially interesting about crowdfunding as a high-level idea. There has certainly been no shortage of attention to crowdfunding in the press and from business people. But in looking at the new JOBS Act exemption for crowdfunding, I see lots of reasons why many companies will avoid it. While this list could be expanded – and will need to be revised as the SEC adopts rules to implement the new exemption – to get things started I offer up these ten reasons: …

Walls of Silence Explained by Howard Sklar

What do you think the reaction of the CCO would be? My first thought about the CCO’s reaction is that it would be, “are you out of your f%&$#ng mind?!” But perhaps that’s not a cultural fit with the company. He might also say, “that’s an interesting perspective.” Which, in one company I know, is the code for “are you out of your f%&$#ng mind?!” One of the first things you have to learn when you go in-house is the company’s (or your boss’) code phrase for “that’s the most boneheaded idea I’ve ever heard!”

At the SEC, Investigations About Investigators Who Investigate Other Investigators by Bruce Carton in Compliance Week

David Kotz, the former SEC Inspector General, departed the agency in January 2012 to rejoin the private sector, and it seemed as if this surge of “investigations of investigations” had ended. It turns out that it has not and, if anything, it seems to be headed for levels of “investigations of investigations” that we have not before reached.

Compliance Balloon by Ront

Compliance Bits and Pieces for May 11

These are some of the compliance-related stories that recently caught my attention.
SEC Whistle blower
A Shiny New Website for the S.E.C. by Kevin Roose in DealBook

Our favorite part of the site is the silver whistle pictured on the homepage. Emblazoned with the agency’s logo, the whistle is a nod to the S.E.C.’s status as the whistleblower of wrongdoing on Wall Street. (And would make a good gag gift for Harry Markopolos.)

When we asked Mr. Nester whether actual, S.E.C.-branded whistles were available for sale to the general public, he replied, “Unfortunately, the cool-looking whistle is available only as a jpeg.”

Why Companies Shouldn’t ‘Do’ Compliance by Dov Seidman in Forbes.com

To be truly effective in shifting behavior, and moving an organization forward, leadership must move from a “governance, risk and compliance” to a “governance, culture and leadership” mindset. Focusing on actions that will build and maintain a values-based system of “governance, culture and leadership” will mean less compliance activity, less cost, and more compliance as a result of real, tangible and sustainable behavior change.

Trust, or verify? by William Carleton

When startups and private companies raise money today from angel investors, they count on the investors to self-certify they are accredited.

Sure, companies might ask prospective investors to fill out questionnaires, and might otherwise draw attention to the significance of the investor’s rep (“these securities are being sold to you under a Rule 506 exemption, the validity of which is based, in part, on your representation to us that you are in fact accredited . . . “); but no issuer today asks to see the prospective investor’s tax returns, nor bank balances, nor the appraised value of her art collection.

The SEC, Accredited Crowdfunding, And The Art Of Hair Splitting by Joe Wallin

If this argument is going to inform the SEC’s rulemaking on this subject, and if the SEC believes that this is what the legislative history indicates should inform the rulemaking, then it is unlikely we are going to see a continuation or retention of a check-the-box or questionnaire regime for advertised offerings. However, for non-advertised offerings, perhaps the old regime can continue. And in fact, the argument can be made that it should continue because if there is no advertising then the heightened risk which prompted these verification processes be added won’t exist. Of course, it remains to be seen whether the SEC will require verification in just offerings in which there is general solicitation, or all offerings.

‘Say on Pay’ vote destroys $500MM+ in shareholder value by Marc Hodak in Hodak Value

Aviva’s shareholders, saw the departure of Andrew Moss, their CEO, after his pay package was voted down. While it’s difficult to interpret any given Say on Pay vote, it’s a fair assumption that these votes respond to headline news about a company. In the case of Aviva, the headline appeared to be “Insurer performing badly; CEO pay goes up.” So, here is what the shareholders have wrought: …

[T]he stock drop has cost Aviva’s shareholders over $500 million, even accounting for the general slump in the market over the last couple of days. The shareholder’s putative complaint was that the board had agreed to pay Mr. Moss a $1.86 million bonus, on top of his $1.55 million salary. So, it appears that the shareholders, in their trading capacity, have penalized the company with a half billion dollar CEO changeover cost because they believed, in their proxy voting capacity, that two million dollars was too much to pay their CEO in a bonus.

What is Private Equity? from the Private Equity Growth Capital Council

Compliance Bits and Pieces for April 20

These are a few of the compliance-related stories that recently caught my attention.

How Many Errors Can You Make In 9,000 Words, More Or Less? By Keith Paul Bishop California Corporate and Securities Law Blog

The Jumpstart Our Business Startups Act (JOBS Act) is a very modest 9,000+ words. In comparison, the Dodd-Frank Act is a hefty 360,000+ words. Thus, I find the number of technical errors in the JOBS Act to be surprising. One such error is likely to cause some consternation.

Did Facebook’s Zuckerberg just have a Van Gorkom moment? by Professor Bainbridge

In other words, a board is not excused from exercising its fiduciary duties just because there is a controlling shareholder. To the contrary, judges will be especially skeptical of transactions railroaded through the decision-making process by “an imperial CEO or controlling shareholder with a supine or passive board.”

In other words, if I had been his legal counsel, I would have advised Zuckerberg to be a lot more respectful of his board and the legal niceties.

Condo Rental Programs Are Not Investment Contracts by Ernest E. Badway in Fox Rothschild’s Securities Compliance Sentinel

The court believed that the purchases of these condos with rental options did not rise to the level of an investment contract requiring adherence to the securities laws. In particular, the court considered if the transaction qualified as an investment contract, analyzing if there was an investment of money, common enterprise, and the reasonable expectation of profits to be derived from the efforts of others, among others things. The court focused on the uncertainties of both vertical and horizontal commonality required under the common enterprise element test. In determining that there was a lack of horizontal commonality, the court found that the plaintiffs were not sold securities. The court also noted that there was no requirement to participate in the rental program as well.

SEC Promises Better Rulemaking Efforts in Compliance Week

Speaking at a hearing of the House Government Oversight Committee (which the committee had tartly titled, “SEC’s Aversion to Cost-Benefit Analysis”), SEC Chairman Mary Schapiro admitted that her office has heard an earful of criticism lately, including a stinging federal appeals court decision in 2011 that invalidated a rule for shareholder access to the proxy statement that specific cited poor cost-benefit analysis as part of its reasoning.

The FCPA Database Has A New Name

Compliance Bits and Pieces for April 13

These are some recent compliance-related stories that caught my attention.

The Skyscraper Index from Barclays Capital (via Barry Ritholz’s The Big Picture)

Our Skyscraper Index continues to show an unhealthy correlation between construction of the next world’s tallest building and an impending financial crisis:New York 1930; Chicago 1974; Kuala Lumpar 1997 and Dubai 2010.

Yet often the world’s tallest buildings are simply the edifice of a broader skyscraper building boom, reflecting a widespread misallocation of capital and an impending economic correction.

Investors should therefore pay particular attention to China – today’s biggestbubble builder with 53% of all the world’s skyscrapers under construction – andIndia – which with just two completed skyscrapers, now has 14 skyscrapers under construction

Why Matzo Makers Love Regulation by Adma Davidson in NPR’s Planet Money

Alain Bankier, co-president of Manischewitz, said that the capital investment in the company’s state-of-the-art matzo machinery poses a huge barrier to entry for potential competitors. So rather than being bad for business, all those kosher rules mean Manischwitz won’t have much competition.

Taxes and Cheating by Dan Ariely

To see how witnessing and act of dishonesty would affect participants, we had one student—a confederate named David—stand up after only a minute and claim he’d solved all 20 matrices. The experimenter merely responded that in that case he could take his earnings and go. So how did the participants respond to this display when asked to self-report the number of matrices they solved? By cheating a whole lot: they claimed an average of 15 correct answers, more than twice the average score when cheating was not allowed.

Weighing SEC’s Crackdown on Fraud by Jean Eaglesham in the Wall Street Journal

More than 100 people and firms have now been charged with fraud tied to the financial crisis by the Securities and Exchange Commission, but that hasn’t quelled criticism that the agency hasn’t cracked down hard enough.The SEC passed that milestone Friday when the regulator filed civil-fraud charges against two former Texas bank executives accused of using a loan-modification scheme to make bad real-estate loans look good.

Compliance Bits and Pieces – JOBS Act Edition

The Jumpstart Our Business Startups Act is soon to be law. Here is a smattering of post that caught my attention.

In spite of what you may heave heard, the Senate just effectively killed crowdfunding by Alexander J. Davie

The replacement crowdfunding bill is significantly more complex and fraught with liability for issuers. While even the McHenry approach had some degree of complexity, the Merkley version makes it look simple and straightforward in comparison. Here are just a few examples of some of the differences that I think will sink the new crowdfunding law and prevent it from being of any practical use: ….

The “JOBS” Act and the Capital Raising Process (Crowdfunding and the Consequence of Gambling) by J. Robert Brown Jr. in The Race to the Bottom

But in fact, the crowdfunding exemption included in the JOBS Act is not limited to amounts that investors can afford to lose. The provision allows those with an income or net worth of less than $100,000 to invest up to 5% of that amount or $5000 every year. For those with a net worth or annual income above $100,000, they can invest up to 10% of that amount or up to $100,000 during any 12 month period.

The Three Audiences of the JOBS Act by William Carleton

No one can really know for sure, of course, but I would say that the changes made in the Senate to crowdfunding will make crowdfunding and angel financing mutually exclusive. It’s a bit ironic, but Title II of HR 3606 in many ways puts true crowdfunding behind the accredited investor gate, while giving non-accrediteds a new kind of limited offering registration as an alternative to the others (little used) already out there.

Chowing Down On The JOBS Act And Ralston Purina by Keith Paul Bishop in California Corporate and Securities Law blog

Anyone who has studied securities laws has undoubtedly heard of the Supreme Court’s decision in SEC v. Ralston Purina Co., 346 U.S. 119 (1953). In that case, the Supreme Court struggled with the exemption in the Securities Act of 1933 for “transactions by an issuer not involving any public offering” (now in Section 4(2) but then found in Section 4(1)). Yesterday, Congress passed the “Jumpstart Our Business Startups Act“. Assuming that President Obama signs this bill, the JOBS Act will dramatically change the longstanding limitations on private offerings.

Jobs Bill Opens Door to Hedgie Advertising by Juliet Chung in WSJ.com’s Deal Journal

Could pro golfers soon test their skills at the Paulson & Co. Open? Will legions of basketball or hockey fans one day cheer on their home team from the friendly confines of D.E. Shaw Center?

Which Hedge Fund Manager’s TV Commercial Are You Most Looking Forward To? by Matt Levine in NY Times.com’s DealBreaker

“I take back whatever mildly negative things I may have said about the JOBS Act, since apparently in addition to making it easier for small startups to rip off investors, it will also make it easier for small hedge funds to rip off investors”

The jumper cables are Coleman Cable 08565 12-Foot Heavy-Duty Booster Cables, 6-Gauge

Compliance Bits and Pieces for March 23

Photo by Carol Highsmith, April 2007. http://hdl.loc.gov/loc.pnp/highsm.04037

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.