I don’t take pleasure from others’ failings, but I do try to learn lessons. The recent settlement between Wunderlich Securities and the Securities and Exchange Commission is full of lessons to be learned. overcharged advisory clients for commissions and other transactional fees in violation of Section 206(2) of the Advisers Act failed to satisfy the … Read more »
Compliance Bits and Pieces for June 3
Here are some recent compliance-related stories that caught my attention: Launching Into Unethical Behavior: Lessons from the Challenger Disaster by Ann E. Tenbrunsel and Max H. Bazerman in Freakonomics On the night before the Challenger was set to launch, a group of NASA engineers and managers met with the shuttle contracting firm Morton Thiokol to … Read more »
Paying a Bribe? There’s an App for that
Can you crowdsource the fight against corruption? An international team coming from Estonia, Lithuania, Finland and Iran thinks you might. They created a smartphone app that allows people to anonymously report incidences of bribery and later see the data visualized on an interactive map. Bribespot is an app that allows you to see how much … Read more »
Revisiting the Fabulous Fab
Last summer, Fabrice Tourre didn’t turn around fast enough to see the bus coming at him. Goldman Sachs had given him a big push and put him in the front and center of their big bet on a crash in the residential mortgage securities market. Tourre ended up as the Fabulous Fab after giving himself … Read more »
Felons and Fund Managers
Most private funds rely on a Rule 506 exemption under Regulation D to sell their limited partnership interests to investors. A new SEC rule amending Rule 506 should catch the eye of private fund compliance officers. The concept it fairly straight-forward: felons should not be allowed to take advantage of the private offering exemptions. Dodd-Frank … Read more »
Compliance Bits and Pieces for May 27
Here are some compliance-related stories that recently caught my eye: Gold is Not an Investment by Carl Richards in the NY TImes.com’s Bucks Gold is not an investment. It’s a speculation. Investments are made by evaluating underlying value. Speculative bets are made by looking at the price of something and simply hoping the price goes … Read more »
The New SEC Whistleblower Rule
In a blow to the efforts of internal compliance, the SEC will let corporate whistle-blowers collect a percentage of penalties when they report financial wrongdoing, even when they bypass companies’ internal complaint systems. “For an agency with limited resources like the SEC, it is critical to be able to leverage the resources of people who … Read more »
Learning Lessons From Gaffken & Barriger
I read through an occasional SEC complaint looking for lessons to be learned. Those involving real estate funds particularly catch my eye. I found the complaint against Lloyd V. Barriger (.pdf) and his management of his Gaffken & Barriger Fund to be full of lessons. I don’t have any independent facts and am accepting the … Read more »
Have You Set Up Your IARD Account?
With the impending deadline for filing Form ADV to register as an investment adviser, you need to jump through some hoops before you can do the filing. First step is visiting the Investment Adviser Registration Depository. Form ADV needs to be filed electronically and this is the electronic mailbox. But first you need an account. … Read more »
Time for the SEC to Extend a Deadline
Dodd-Frank set a July 21 deadline for changes to the Investment Advisers Act in Title IV: The Private Fund Investment Advisers Registration Act. This included the expiration of the private adviser exemption from registration under the Investment Advisers Act, the addition of an new exemption for “venture capital fund advisers” and the increase in the … Read more »