Doug Cornelius on compliance for private equity real estate
The Office of Compliance Inspections and Examinations released a new risk alert last week on COVID-19 compliance risks for broker-dealers and investment advisers. OCIE broke the concerns into six categories: protection of investors’ assets; supervision of personnel; practices relating to fees, expenses, and financial transactions; investment fraud; business continuity; and the protection of investor and … Read more »
The Securities and Exchange Commission will always be focused on charges to a private fund that get paid to the fund adviser or affiliate. OCIE placed this warning flag in the sand back in 2015. A fund manager has to clearly disclose affiliate fee in the fund documents. If the fee is based on a … Read more »
The New York Attorney General has been keeping busy. Yesterday it was a lawsuit against the National Rifle Association. There are the previous lawsuits against the Trump Foundation and the Trump Organization. I missed the April announcement of proposed changes to some of the securities regulations in New York. One caught my eye and caught … Read more »
Registered Investment Advisers had a June 30th deadline for delivery of the new Form CRS to their clients. The forms also need to be filed with the SEC. If you thought the SEC would not look at them, you were wrong. The SEC’s new Standards of Conduct Implementation Committee has been reviewing the Form CRS … Read more »
For investment advisers the key is conflicts. You have to disclose them and property manage them. What is the biggest conflict for an investment adviser? (The title probably gave it away.) Fees. This is particularly true for private funds where the investors may not see the actual fee calculation. The basis for the calculation may … Read more »
The Financial Crimes Enforcement Network issued its latest collection of Frequently Asked Questions on the requirements for Customer Due Diligence requirements for Covered Financial Institutions. For anyone looking for decisive answers and bright-line tests, you’ll have to look elsewhere. The answers will leave you wondering why FinCEN even bothered to publish this answers. Private fund … Read more »
Read some great research by Regulatory Compliance Watch. Bill Myers wrote a story summarizing the Form ADV data for over 4500 private fund advisers. Of that, at least 2800 had more than one job at the firm. Only 622 listed the title for their CCO as only compliance officer. The most common other hat was … Read more »
Thank you for reading Compliance Building. It’s been quiet here on the publishing front. Not that compliance is any less important. With the pandemic, I’ve been pulled in several different directions. One direction that has not altered is my commitment to fight against cancer. The pandemic has cancelled the organized ride part of the Pan … Read more »
In browsing the charges against Michael Barry Carter, it seemed like a typical case of a financial adviser stealing from his clients. The total amount was large. The math of how much he stole from his clients and how much he pocketed confused me in browsing the two press releases. The US Attorney’s headline has … Read more »
The SEC’s Office of Compliance Inspections and Examinations issued a new Risk Alert: Observations from Examinations of Investment Advisers Managing Private Funds. OCIE highlights three areas of noncompliance in the Risk Alert: conflicts of interest, fees and expenses, and misuse of material nonpublic information. OCIE lays out some of the conflicts that are particular to … Read more »