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Small Business Capital Access & Job Preservation Act – Part 2

The House Financial Services Committee pushed ahead a bill designed to exempt advisers to certain private equity funds from the new registration requirements imposed by Title IV of the Dodd-Frank Act. The Small Business Capital Access & Job Preservation Act was presented last session, and Congressman Hurt has brought it back again. Except as provided […]

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Best Execution Failure

Best execution refers to the obligation of an investment adviser to ensure that the prices its orders receive reflect the optimal mix of price improvement, speed and likelihood of execution. The concern is whether the investment adviser is getting some other compensation that influences the decision to use one broker over another. This concern should […]

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Updated Guidance on the Custody Rule for Private Funds

The Securities and Exchange Commission has provided some updated guidance on the Custody Rule for private funds. It has sometimes been tricky for private funds to comply with Rule 206(4)-2. The custody rule deems it to be a fraudulent, deceptive or manipulative act, practice or course of business for an adviser to have custody of […]

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Employee Criminal History and 506(d)

The bad actor rule in the new Rule 506(d) makes private placements a bit harder and will require private funds and companies to do more homework in connection with the fundraising. That’s because an issuer cannot rely on the Rule 506 exemption if the issuer or any other person covered by the rule had a […]

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Small Business Capital Access and Job Preservation Act

Congress, or at least the the House Financial Services Committee, is proposing some relief for private equity funds. The Committee approved the Small Business Capital Access and Job Preservation Act, along with three other pieces of legislation. The bill would exempt private equity fund managers from the registration and reporting requirements of the Investment Adviser […]

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Regulation of Investment Advisers

The Securities and Exchange Commission recently published a compendium describing the regulation of investment advisers: Regulation of Investment Advisers. It’s not light reading, but the 59-pages provide a helpful overview of investment adviser regulation. It comes from the Staff of the Investment Adviser Regulation Office in the Division of Investment Management. So it carries a […]

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One Week Left to File Your Form ADV Update

Most advisory firms and fund managers end their fiscal year on December 31. Under the SEC Advisers Act Rule 0-4, you have 90 days to file your Form ADV update after the end of your fiscal year. Last year that put the filing deadline on March 30 because it was a leap year. The next […]

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Valuation Failures with a Fund of Funds

A Securities and Exchange Commission investigation found that two funds sponsored by Oppenheimer were involved in fraudulent valuations. Oppenheimer sent out misleading quarterly reports and marketing materials stating that the fund’s holdings of other private equity funds were valued “based on the underlying managers’ estimated values.” But that was not always true. The portfolio manager […]

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Beverly Hillbillies Ciphering for Assets Under Management

It was a case of math failure. Where exactly should that decimal place go? The Barthelemy Group of New York and New Jersey calculated assets under management as $26.28 million. But it looks like the decimal point was in the wrong place and the firm actually had $2.628 million under management. Evens Barthelemy, the founder, […]

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Another Danger of Overstating Assets

The Securities Division of the Massachusetts’ Secretary of State’s office filed an administrative complaint against CCR Wealth Management. The complaint seeks to deny CCR Wealth Management registration as an investment adviser. The secretary of state’s office said inspectors became suspicious when they noticed that CCR had reported static denominations over a period of time, even […]

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