The Securities and Exchange Commission proposed a new
rule that would require advisers to private funds to report information for use
by the Financial Stability Oversight Council in monitoring risk to the U.S.
financial system. Sections 404
of the Dodd-Frank Wall Street Reform and Consumer...
According to a story in Investment
News , the Securities and Exchange Commission began a sweep of
investment advisers' use of social media and social networking last month.
The story has a quote from Doug Flynn, an adviser at
Flynn Zito Capital Management LLC, that is exactly on target for...
Weisbach Professor and Ralph W. Kurtz Chair in Finance at The Ohio State
University, and his colleagues, Ji-Woong Chung, Berk A. Sensoy and Léa H.
Stern, are looking at the effect of the pay for performance at private equity
funds. One hand, there is the current income from management...
Yesterday, Bruce Carton of Securities Docket hosted a
SEC's Asset Management Unit and Strategies for Avoiding Trouble in 2011 and
Beyond . He managed to get Bruce Karpati, the co-head of the SEC's Asset
Management unit, to participate. Also joining the presentation were John...
Finally, the SEC is going to take some action today on
the regulation of investment advisers, venture capital funds, and private fund
For years, they've been trying to get regulatory control
of private funds. Now they are going to get it.
Do they really want it?
Business Capital Access and Job Preservation Act , H.R. 1082, took another
step forward this week when it was approved by the House Committee on Financial
Services. It still has a long way to go before coming law so this is no time to
stop getting your compliance infrastructure in place...
In addition to filing Form ADV with the SEC when they
register with the Securities and Exchange Commission, private fund managers
will also need to start filing Form PF next year.
The amount of information required by Form PF is tiered.
Advisers managing less than $150 million in private funds...
From my discussions, many real estate fund managers are
still not sure if they are subject to registration under the Investment
Advisers Act. The definition of "private fund" can exclude many real estate
funds depending on the structure of their investments. I think the result is
This past week, the SEC and CFTC jointly adopted rules
regarding the new Form PF that certain fund managers will need to file under
the Adviser's Act. The form will require advisers to disclosure
detailed information about their funds' holdings and investments to federal
If you are looking for a good guide to help your private equity compliance program, PEI Media's US Private Equity Fund Compliance Guide is a good place to start. There have been a few changes since its publication in 2010. PEI Media has just published the US Private Equity Fund Compliance Companion...
The Managed Funds Association recently submitted a comment letter to the Securities and Exchange Commission
dated January 6, 2012 requesting the SEC to amend Rule 502(c) of Regulation D
to exempt private funds, such as hedge funds, private equity funds, and venture
capital funds, from the ban on general...
The San Francisco Office of the SEC has an informal
inquiry into the valuations of private equity funds. IA Watch has received a
copy of the sweep letter from the Division of Enforcement directed to a private
equity fund manager.
Some highlights in the request:
formation and offering...
Identity theft is a serious problem. Title X of the
Dodd-Frank Wall Street Reform and Consumer Protection Act increased the scope
of firms that would be subject to federal regulatory requirements on identity
theft rules. The Securities Exchange Commission and the Commodities Futures
The SEC has been poking around valuations for a while.
First it was from the chaos of the 2008 financial crisis. The sudden
illiquidity and drop in prices left many scratching their heads about the
proper valuations for their assets.
That was the main charge against the Bear
Stearns hedge fund...
An EIA which summarizes the new
Form PF adopted on October 21, 2011 by the Securities and Exchange Commission.
This form is used to collect information from private fund advisers, primarily
to assist the Financial Stability Oversight Council ("FSOC") in
determining whether any such funds present...
Crowdfunding may provide an interesting way for some
companies to raise capital. It's definitely getting a lot of the hype
since passage of the Jumpstart Our Business Startups ( JOBS ) Act
earlier this month. I've read articles talking about how crowdfunding is
going to disrupt funding for...
On February 8, 2012, the
Commodity Futures Trading Commission ("CFTC" or
"Commission") issued final regulations that repeal the commodity pool
operator ("CPO") registration exemption widely used by the operators
of private funds offered only to highly sophisticated...
Bruce Karpati, the Chief of the SEC Enforcement
Division's Asset Management Unit, held a Q&A session entitled " Private
Equity Enforcement Concerns " at the Private Equity International Conference
held in New York on January 23, 2013. He addressed private equity firm
There are indications from Washington that hedge funds,
long exempt from anti-money laundering reporting rules, may soon be
brought into the fold under new rules proposed by the Treasury
Department's Financial Crimes Enforcement Network (FinCEN).
Rule-making issues aside, hedge fund managers...
This article is also appearing on The Venture Alley and on Startup Law Blog . Per the
authors, readers may feel free to re-post this content elsewhere as well.
The world is changing for venture funds and similar funds
in Washington State, and not necessarily for the better. It used to be
On July 24, 2013, in a case the court said was one of “first impression,” the First Circuit held that, due to the nature of its involvement in the management of its portfolio company’s operations, a private equity firm was potentially liable for the portfolio company’s pension...
The recent decision in Britt v. Twin City Fire Insurance Co. , C.A. No. 8SACV 12-1355-JST (JPRx), slip op. (C.D. Cal. June 26, 2013), highlights some important insurance considerations for private equity funds and the individuals they place as directors or officers at portfolio companies...
In a series of recent conversations with industry colleagues around the world, one of the recurring themes has been the growing risk of regulatory investigation and enforcement action companies outside the U.S. are facing. One very particular aspect of the companies’ growing risk is that it frequently...
The impact of the October 1 shutdown of the federal government on hedge funds is now playing out in slow motion. While the SEC remains open due to its ability to self-fund for a few weeks, its sister agency, the CFTC has shut down. These are the agencies that provide oversight to the securities and commodities...
Trading ahead of client accounts. Insider trading. Breach of fiduciary duty.
These were just some of the concerns that the SEC had when it adopted the requirement for investment advisers to establish policies to monitor employee personal trading in 2004. While seemingly straightforward, in the decade...