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Real Estate Investing and Crowdfunding

Real estate investing is capital-intensive. It should be a natural area for crowdfunding. The big concern is fees and conflicts. With a tech startup, you are investing in an idea and the people with the idea. It may grow exponentially or blow up, leaving little behind. Part of the investment is paying the people to […]

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The SEC Endorses Yelp for Investment Advisers

Investment Advisers and the Securities and Exchange Commission have been struggling with the use of social media. Advisers see it as a way to communicate with clients and potential clients. The SEC sees it as an area ripe for fraud. Both are right. The SEC has stuck fast to rules on advertisements when it comes […]

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Document Request List for Never-Before-Examined Advisers

In January, the Securities and Exchange Commission announced in its annual exam priorities for 2014 that it wanted to emphasize exams on never-before examined firms that had been registered before 2012. Then in February, the SEC officially announced its never-before-examined initiative. It looks a lot like the presence exams. ACA Compliance got its hands on […]

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Compliance Lessons From My Dog

My dog has taught me a few lessons about compliance. (That’s me and Ghost taking a well-deserved nap.) Start early. We started dog training early to focus on developing good habits at an early stage. (We did lose a few shoes while he was a puppy.) It’s never too late to unlearn bad habits, but […]

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Compliance Bricks and Mortar for February 7

These are some of the compliance-related stories that recently caught my attention. The Financial industry – Life is Getting Tough by Michael Volkov in Corruption, Crime & Compliance In recent statements from the Justice Department and regulatory officials, prosecutors and regulators have warned the industry that individuals may be prosecuted in the future for money […]

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SEC Compliance Outreach Program National Seminar

The SEC’s Office of Compliance Inspections and Examinations (OCIE), Division of Investment Management, and the Asset Management Unit of the Division of Enforcement jointly sponsor the compliance outreach program. On January 30, 2014, there was a national meeting. These are my notes. Welcoming Remarks from Chair Mary Jo White Investors and the SEC relies on […]

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Due Diligence for Alternative Investments

The Securities and Exchange Commission published a new risk alert on investment advisers and alternative investments. It’s a rambling piece that spends most its time laying out the OCIE’s observations on due diligence practices. To the extent there is any focus, it’s focus is on the perspective of advisers to pension funds and managers of […]

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Fees and Conflicts

I sat down with a few people last week to discuss various fee structures with fund managers and investment advisers. One fee was raised as potentially problematic. “I’m not sure if this fee is a conflict.” My thought is that every fee is an inherent conflict. You are taking money from the fund investor or […]

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Volker Rule and Real Estate Funds

Five regulatory agencies adopted the final rules that implement the Volcker Rule, a provision of the Dodd-Frank Wall Street Reform and Consumer Protection Act. It’s a big, complicated, ugly rule that will drive compliance officers at banks crazy trying to implement. Have fun reading all 964 pages. The text of the regulations themselves only run […]

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Compliance Program Failure

The SEC slapped a fund manager and its out-sourced CCO. The main charge was engaging in undisclosed principal transactions. Beyond that obvious conflict issue, the order has some interesting statements about failures in the compliance program. Parallax Investments, LLC, a Houston based firm, registered with the SEC as investment adviser in 2010. It also had […]

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