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custody and private funds

Co-investments and Conflicts

I have seen a few indications from the Securities and Exchange Commission showing that examiners are concerned about co-investments. I have yet to see a large over-arching activity in the industry that has been identified as problematic. I saw an action last week for a fund advisor related to co-investments so it caught my eye. Upon […]

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Compliance and Conflicts with Exxon Mobil and the Trump Administration

President-Elect Trump has many conflicts of interest as he prepares to take office. It’s been a long time since the president-elect has been so deeply involved in a active businesses. His appointment of Rex Tillerson as Secretary of State creates another batch of conflicts for the administration and for Exxon-Mobil. As is typical with many […]

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What Kind of Car Does Your Fund Manager Drive?

In a new paper, researchers found that hedge fund managers who own powerful sports cars take on more investment risk and are more likely to engage in fraudulent behavior. The inverse is also true: Drivers of minivans tend to deliver less volatile returns, according to the study. “Specifically, sports car drivers deliver returns that are […]

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“May” or “Will” is Less Important Than Completeness

The Robare case popped to my attention last year because the Securities and Exchange Commission was focused on the use of the word “may” instead of “will” as adequate disclose of a fee arrangement. My eyes rolled at such distinction. The administrative law judge felt the same way and dismissed the case. Now the Commission […]

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Politics and Conflicts of Interest

Politicians and their staff are prone to conflicts of interest. Legislative, executive, and regualtory actions will affect the value of companies and their investors. Hillary Clinton failed to address the conflicts between her actions as Secretary of State and the fundraising of the Clinton Foundation. One of the campaign promises of Donald Trump was to tackle […]

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The Downside to Advertisement Restrictions

Going back over my notes in search of guidance on when advertising for a private equity firm is advertising restricted under the Investment Advisers Act and when it is advertising for the firm’s products and services, I’m left uncertain. I was hoping that the gun jumping interpretations would offer some meaningful guidance. So far, I […]

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CCO Needs To Be a Jack of All Trades

Andrew Donahue, the Chief of Staff of the Securities and Exchange Commission gave a speech earlier this month to the National Society of Compliance Professionals National Conference. He was attempting to share his thoughts on the current and future challenges that compliance professionals in the financial services area face. He envisions that CCOs will need […]

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The SEC’s Pay-to-Play Rule and California Labor Law

Keith Bishop chimed in on Campaign Contributions and the SEC in the context of California law: Pay-To-Play Meets The California Labor Code at the California Corporate & Securities Law blog. He point to  California Labor Code: Section 1101. No employer shall make, adopt, or enforce any rule, regulation, or policy: (a) Forbidding or preventing employees from […]

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Post Debate Campaign Contributions and the SEC

With the first of the presidential debates over, I thought it would be a good time to refresh myself on the SEC’s limits on political campaign donations by investment advisers. SEC Rule 206(4)-5 was put in place to limit political influence on government pension plan investment choices. Under the rule: 1. All political campaign contributions should be […]

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The SEC Wants To Know If You Have An Outsourced CCO

Continuing this week on the changes to the Form ADV is a revision to Item 1.J that lists the chief compliance officer. The new Form ADV will require a registered investment adviser to disclose whether the firm’s CCO is compensated or employed by someone other than the adviser. That is, the SEC wants to know […]

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