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How to Allocate Broken Deal Expenses After the KKR Case?

The Securities and Exchange Commission charged Kohlberg Kravis Roberts & Co. (KKR) with misallocating more than $17 million in “broken deal” expenses to its private equity funds as a breach of KKR’s fiduciary duty. The SEC felt that KKR should not have charged all of those broken deal expenses to the Fund. But how should […]

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Allocation of Broken Deal Expenses

The Securities and Exchange Commission charged Kohlberg Kravis Roberts & Co. (KKR) with misallocating more than $17 million in “broken deal” expenses to its private equity funds. The SEC found this to be a breach of KKR’s fiduciary duty. An SEC investigation found that from 2006 to 2011, KKR incurred $338 million in broken deal […]

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SEC Loosens the Standards in Trade Monitoring

One of the more difficult aspects of a private equity fund when it registers as an investment adviser is dealing with the Rule 204A-1 requirement of monitoring employee trading. The SEC recently issued guidance on the applicability to managed accounts when there is no direct or indirect influence or control. The Guidance focuses on the […]

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Cyber Insurance: A Pragmatic Approach to a Growing Necessity

Cybersecurity has become an increasing focus of financial regulators. Insurance companies are stepping up to help deal with the risk of cyber attacks.  Bruce Carton’s CyberSecurity Docket hosted a great webinar on cyber insurance. These are some of the highlights. John Reed Stark is President of John Reed Stark Consulting LLC, a data breach incident […]

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Compliance Failures and the TSA

I was not at all surprised when it was revealed that the Transportation Security Administration had a 95% failure rate during a recent series of tests. I’m sure the TSA screeners found a much higher percentage of water bottles and laptops left in their cases. An internal investigation of TSA security checkpoints at the nation’s […]

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Compliance and Co-Investment Allocation

Co-investment is an area that many institutional investors look for when investing with a fund manager. It’s generally a good deal for them because the investment is overseen by the fund manager without having to pay the fund management fee. Depending on the program, it may be a lesser fee or no fee. And of […]

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Vertical Integration of Fund Manager and Related Party Expenses

Marc Wyatt had been on the job for 16 days as the Acting Director Office of Compliance Inspections and Examinations when he took his first shots at private fund managers. He took a shot directly at real estate fund managers and indirectly at other types of fund managers with vertical integration. The Speech While we […]

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Brady, Footballs, and Tone at the Top

Handsome rich man from New England forced to take four-week vacation with supermodel wife. As a football fan, New England Patriots fan and a compliance professional, I can’t let the Wells Report and the punishment levied by the NFL pass without comment. There was a violation of the league rules and there should be punishment. […]

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Private Equity Real Estate Top 50 – 2015 Edition of Who is Registered

Private Equity Real Estate has released its ranking of the top 50 real estate private equity fund managers. As I have done in the past, I parsed the list to see which managers are registered with the Securities and Exchange Commission as investment advisers. (Disclosure: my company is on the list.) — Name of institution […]

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Can A Fund Pay for the Manager’s Office Expenses?

This is not a question that you can answer without any background. Theoretically, a fund can directly pay a fund’s office expenses. It’s just that most investors do not expect to pay for a manager’s office expenses. Investors expect the management fee they pay to cover those expenses, with the rest as profit for the […]

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