The US Supreme Court struck down some campaign finance limitations in McCutcheon v. Federal Election Commission. My first question was whether this court ruling would impact the Securities and Exchange Commission’s Rule 206(4)-5. The answer is “no.” Mr. McCutcheon wanted to contribute $1776 dollars to a long list of political candidates. Each individual contribution is … Read more »
Can a Vending Machine Be a Security?
The Securities and Exchange Commission brought charges against Joseph Signore and Paul Lewis Schumack, II in connection with an alleged investment fraud concerning the sales and marketing of a “Virtual Concierge” machine. The machine looks like an ATM, but carries advertising and can print tickets and coupons. It looks shady, but a machine alone is … Read more »
The SEC Has Seen Your Private Equity Fees And Is Not Happy With Them
According to a story in Bloomberg, the Securities and Exchange Commission has examined about 400 private equity firms and found that more than half have charged “unjustified fees and expenses without notifying investors”. The editor decided to change the headline from “unjustified” to “bogus”. Fees and expenses charged by a fund manager to investors in … Read more »
What Are the Implications of the SEC’s New Private Fund Exam Unit
Greg Roumeliotis and Sarah N. Lynch are reporting in Reuters that the Securities and Exchange Commission has formed a new group dedicated to the exam of private equity and hedge funds. This new private fund unit will be co-chaired by Igor Rozenblit and Marc Wyatt. Rozenblit is coming from the asset management unit of the … Read more »
Compliance Bricks and Mortar for April 4
These are some of the compliance-related stories that recently caught my attention. Small Banks Look to Sell as Rules Bite by Michael Rappaport in the Wall Street Journal In a period when low interest rates are squeezing small banks, the costs of adhering to new regulations are taking a toll. Executives from at least a … Read more »
Accredited Investor Verification
When Congress imposed a lifting of the ban on advertisements for private placements, it also imposed a mandate that the fundraiser “take reasonable steps to verify that purchasers of the securities are accredited investors.” The methods for verification were to be determined by the Securities and Exchange Commission. The SEC, to its credit, did not … Read more »
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 … Read more »
The SEC Shows Some Respect for the Working Woman
The Securities and Exchange Commission decided to emphasize that working wives can be a source of material non-public information. The SEC press release highlighted insider trading cases brought against husbands who engaged in insider trading after learning confidential information from their wives. The first case was against Tyrone Hawk. His wife worked at Oracle. Mr. … Read more »
Compliance Bricks and Mortar for March 28
These are some of the compliance-related stories that recently caught my attention. Encouraging Communication of Employee Concerns by Michael Volkov in Corruption, Crime & Compliance One of the hardest issues for compliance professionals is encouraging employees to raise concerns about ethics and compliance issues. It has become even more difficult when the government establishes whistleblower … Read more »
Bank Fraud is Okay, But not Drugs or Terrorism
I would like to think that many of the bankers involved in illegal money laundering are not actually aware of the full extent of their malfeasance. Maybe they should have done a better job looking at a client when they noticed a red flag. But sometimes you run across a case where the bankers are … Read more »