Section 206 of the Investment Advisers Act prohibits fraud, deception or manipulation, regardless of whether the fund manager is registered. Once registered, Rule 206(4)-1 imposes additional restrictions on advertising that the SEC has determined would be fraudulent, deceptive or manipulative. The first item on the list of fraudulent, deceptive or manipulative practices is testimonials, which … Read more »
Compliance Bits and Pieces – Good Friday Edition
The stock markets are closed, but most banks are open. I’m taking the day off from work, but wanted to highlight a few compliance-related stories that caught my eye. Justice is served, but more so after lunch: how food-breaks sway the decisions of judges by Ed Yong in Discover’s Not Exactly Rocket Science There’s an … Read more »
Performance Results in Fund Brochures
Section 206 of the Investment Advisers Act prohibits fraud, deception or manipulation, regardless of whether the fund manager is registered. Once registered, Rule 206(4)-1 imposes additional restrictions on advertising that the SEC has determined would be fraudulent, deceptive or manipulative. The first item on the list of fraudulent, deceptive or manipulative practices is testimonials, which … Read more »
Ratings and Fund Managers
Investment advisers, and therefore fund managers once they register as investment advisers, are limited in how they advertise. Section 206 of the Investment Advisers Act already prohibits fraud, deception or manipulation, regardless of whether the fund manager is registered. Once registered, Rule 206(4)-1 imposes additional restrictions on advertising that the SEC has determined would be … Read more »
Client Lists and Private Fund Managers
Section 206 of the Investment Advisers Act prohibits fraud, deception or manipulation, regardless of whether the fund manager is registered. Once registered, Rule 206(4)-1 imposes additional restrictions on advertising that the SEC has determined would be fraudulent deceptive or manipulative. The first item on the list of restrictions is testimonials. This prohibition reflects the concern … Read more »
Patriots’ Day and Compliance
Patriots’ Day is a Massachusetts holiday honoring the anniversary of the Battles of Lexington and Concord, the first battles of the Revolutionary War. Since Maine was once part of Massachusetts, it is also a holiday in Maine. Although they switch the possessive to Patriot’s Day. That means Paul Revere and William Dawes mount their horses … Read more »
Free Will and Compliance
“Human Irony” from Saturday Morning Breakfast Cereal Heisenberg Uncertainty: Published by Werner Heisenberg in 1927, the principle implies that it is impossible to determine simultaneously both the position and the momentum of an electron or any other particle with any great degree of accuracy or certainty. Read more »
Intent and the Advertising Rule for Investment Advisers
In it’s prohibition against fraud, deceit and manipulation, Section 206 of the Investment Advisers Act is strict. There is no requirement of intent. You can argue that you didn’t mean to mean to commit fraud. That may affect whether you get referred to enforcement instead of merely getting hit with a deficiency letter or an … Read more »
Is it an Advertisement?
Section 206 of the Investment Advisers Act prohibits fraud, deception or manipulation, regardless of whether the fund manager is registered. Once registered, Rule 206(4)-1 imposes additional restrictions on advertising that the SEC has determined would be fraudulent deceptive or manipulative. So what is an advertisement for purposes of the rule 206(4)-1: “[A]ny notice, circular, letter … Read more »
Marketing Limitations on Private Funds
As a private fund manager registering as an investment adviser, you get new limitations on how you market and sell interests in your funds. It all starts with Section 206 of the Investment Advisers Act: It shall be unlawful for any investment adviser, by use of the mails or any means or instrumentality of interstate … Read more »