Baseball season is here. That means businesses will be opening their boxes and seats for entertaining clients and potential clients. Of course those tickets are gifts. How do you treat them under your company’s gifts policy or a government’s ethics policy? One typical requirement is that you pay for the tickets. Face value is the … Read more »
The Knowledgeable Employee Exemption for Private Funds
UPDATE: See More Guidance on Knowledgeable Employee Exemption for Private Funds When operating under the Section 3(c)(7) exemption from the Investment Company Act, the issue then becomes how a private investment fund can provide an equity ownership to key employees. Its unlikely that your key employees will have the $5 million in investments needed to … Read more »
Qualified Purchasers under the Investment Company Act
In a private fund exempt under 3(c)(1) investors only generally need to be accredited investors (and “qualified clients” if the fund manager is SEC registered. If you have more than 100 investors in the fund you will need to fall under the 3(c)(7) exemption. That means all of your investors must be “qualified purchasers.” A … Read more »
Private Fund Exemptions under the Investment Company Act
Private investment funds primarily use two exemptions to avoid being defined as an “investment company” under the Investment Company Act of 1940: Section 3(c)(1) or Section 3(c)(7). Less than 100 Investors Section 3(c)(1) of the Investment Company Act excludes from being an investment company any issuer whose outstanding securities are beneficially owned by not more … Read more »
Feds Release Usable Model Consumer Privacy Notice
There was much cheering when federal regulators finally released their Final Model Privacy Notice Form back in November. That was quickly followed by a gnashing of teeth when it turns out the regulators did not understand the concept of a form or how to use Adobe Acrobat. They merely created a static document that you … Read more »
Compliance Bits and Pieces for April 16
Here are some interesting compliance stories from the past week: Chief Compliance Officers, SEC-style by Matt Kelly in Compliance Week‘s The Big Picture Griffin is the SEC’s first-ever chief compliance officer, and her arrival is long overdue. It stems from news that broke last May of an insider-trading scandal within the SEC, which is pretty … Read more »
Taxonomy and Compliance
Compliance often has to deal with a great big piles of data. When tackling a big pile of data, it helps to organize the data into a taxonomy. The taxonomy helps with analysis. Of course, just by choosing the nodes in the taxonomy you are influencing the view of the data. I was struck by … Read more »
The Similarites Between WaMu and GM
Never stop the production line! Yesterday, evidence came out that Washington Mutual knew about fraud in its residential mortgage originations. No surprise. There was lots of fraud in the heyday of the residential mortgage boom. What was surprising was that WaMu allowed these loans to be sold to investors and packaged into residential mortgage backed … Read more »
Revisions to U.S. Sentencing Guidelines for Compliance Programs
At their April meeting, the U.S. Sentencing Commission voted to adopt changes to Chapter 8 of the Sentencing Guidelines Manual. That chapter defines an effective compliance and ethics program and has been one of the sacred texts of the compliance profession. Here is my summary of the changes: Changes to §8B2.1 In defining an Effective … Read more »
April 15 is Tax Day, Except for Flooding
With the recent flooding in Eastern Massachusetts, several counties were declared federal disaster areas. The bonus is that you have an automatic extension for filing your taxes. If you live in Bristol, Essex, Middlesex, Norfolk, Plymouth, Suffolk or Worcester County in Massachusetts, you have until May 11 to file your income taxes. that applies for … Read more »