The Securities and Exchange Commission brought another case out of its Aberrational Performance Inquiry initiative in the Enforcement Division’s Asset Management Unit. That initiative identifies funds with suspicious returns and flags performance that is inconsistent with a fund’s investment strategy or other benchmarks forms a basis for further investigation and scrutiny. The initiative nabbed GLG … Read more »
Compliance Bricks and Mortar for December 13
These are some of the compliance-related stories that recently caught my attention. How Financial Institutions May Benefit from Changes to the Rule Against Perpetuities by Reid K.Weisbord in the CLS Blue Sky Blog Now that most jurisdictions have repealed or abrogated the Rule Against Perpetuities, estate planning practitioners have started to consider whether a trust … Read more »
Participating Bad Actors and Private Funds
The SEC staff issued new Compliance & Disclosure Interpretations relating to Rule 506(d), the new bad actor rule. Under the rule, an issuer may not rely on the Rule 506 exemption if the issuer or any other person covered by rule has a relevant disqualifying event that occurred on or after September 23, 2013 (the … Read more »
Snow Shoveling and Compliance
A winter storm has been hitting big chunks of the United States over the last few days. For me, in Boston, it’s just a small accumulation. That’s enough to cause a nuisance and snarl the morning commute. For me, one test of compliance is snow shoveling. Did my neighbors shovel their sidewalks so people can … Read more »
Compliance Bricks and Mortar for December 6
These are some of the compliance related stories that recently caught my attention. When blowing the whistle is a conflict of interest in Conflicts of Interest Blog Employees generally owe duties of loyalty to their companies (at least under US law), but for some time whistleblowing has not seen as a breach of such duty. … Read more »
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 … Read more »
The Upcoming Changes to the Accredited Investor Standard
Section 413 of the Dodd-Frank Act requires the Securities and Exchange Commission to review the accredited investor definition by July 21, 2014, the fourth anniversary of President Obama’s signing of the law. In a letter to Congressman Scott Garrett, SEC Chair Mary Jo White said that the Commission staff has begun a comprehensive review of the accredited … Read more »
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 … Read more »
Happy Thanksgivukkah!
So, for the first time since 1888 both Thanksgiving AND Hanukkah fall on the same day. Enjoy some time off with friends and family. I am. Read more »
Some Relief for a Fund Manager Under the Political Contributions Rule
SEC Rule 206(4)-5 for investment advisers and fund managers limits the ability of a firm’s employees to make political contributions. It’s a nasty rule. Violation of the rule does not require any bad intent. The breadth of affected political candidates is long, diverse, and hard to discover. Anthony Yoseloff worked at Davidson Kempner Capital Management … Read more »