Banking and Finance

Recent Posts

Hedge Funds Must Ramp Up Infrastructure to Accommodate Liquid Alts
Posted on 1 Oct 2014 by Judith Gross

Pressures have been mounting on hedge fund managers to hedge their own businesses and diversify away from the hedge fund model itself. Lackluster performance, difficult markets, fees that are perceived as too high, scandals and conflicts of interests... Read More

Rhode Island Bets Big on Hedge Funds
Posted on 12 Aug 2013 by LexisNexis Legal Newsroom Staff

Rhode Island has put 14 percent, or $1 billion, of its $7.5 billion in pension fund assets into a form of investment generally considered the exclusive province of sophisticated money managers and wealthy investors: hedge funds. The state is now short... Read More

Hedge Funds Wrestle with Employee Personal Account Trading Conflicts
Posted on 6 Mar 2014 by Judith Gross

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... Read More

Sometimes You Get Stuck and Can’t Get Out
Posted on 22 Jun 2011 by Doug Cornelius

Finally, the SEC is going to take some action today on the regulation of investment advisers, venture capital funds, and private fund managers. For years, they've been trying to get regulatory control of private funds. Now they are going to... Read More

Massachusetts and Expert Network Services
Posted on 23 Aug 2011 by Doug Cornelius

At least one of the hedge funds being investigated for its use of expert networks in based in Massachusetts. In an unusual instance of the state regulators acting before Securities and Exchange Commission, the Massachusetts securities regulators are... Read More

Hedge Fund Boards of Directors Play Vital Role
Posted on 17 Oct 2011 by Judith Gross

The role of directors on offshore hedge funds has often been, at best, a limited oversight role, with perfunctory annual meetings and limited interchange with the fund itself during the year.* This has been changing - slowly- as compliance moves to... Read More

Cybersecurity of Hedge Fund Data
Posted on 3 Jun 2014 by Judith Gross

The cybersecurity of hedge fund data is now a front-burner issue for many firms. In the wake of recent NSA leaks, privacy breaches and hacking scandals, both the regulators and the firms themselves have moved this up in the list of concerns. Issues relate... Read More

Insider Trading at Hedge Funds: A Risk Area that is Difficult to Address
Posted on 24 Jan 2012 by Judith Gross

Insider trading is an area of risk that hedge fund management finds very difficult to identify and prevent. While the problem has become increasingly prevalent, the tools to be able to assist hedge fund managers have not expanded proportionately. A... Read More

  • Blog Post: Dodd–Frank Wall Street Reform and Consumer Protection Act Regulation of Hedge Funds

    Hedge funds were a key subject of debate during the passage of Dodd-Frank. While the funds were not tied to the causes of the market crisis, they do represent large pools of assets which can impact the market. Regulators frequently note that they have inadequate information about the funds. Accordingly...
  • Blog Post: Sometimes You Get Stuck and Can’t Get Out

    Finally, the SEC is going to take some action today on the regulation of investment advisers, venture capital funds, and private fund managers. 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? Sometimes what...
  • Blog Post: Soros Doesn’t Want Your Money

    In one of the most visible moves as a result of the new SEC regulations on investment advisers, George Soros is closing his $25 billion Quantum Endowment Fund to outside investors and returning their money. Why? "We have relied until now on other exemptions from registration which allowed...
  • Blog Post: Massachusetts and Expert Network Services

    At least one of the hedge funds being investigated for its use of expert networks in based in Massachusetts. In an unusual instance of the state regulators acting before Securities and Exchange Commission, the Massachusetts securities regulators are proposing a new regulation to address the use of...
  • Blog Post: Limiting Redemptions by Limited Partners

    Hedge funds usually give their limited partners an ability to redeem their interests at certain periods during the investment period. That ability is often subject to a "gates provision" that limits a quick outflow of capital. The provision is general there to avoid a liquidity crisis in...
  • Blog Post: Hedge Fund Boards of Directors Play Vital Role

    The role of directors on offshore hedge funds has often been, at best, a limited oversight role, with perfunctory annual meetings and limited interchange with the fund itself during the year.* This has been changing - slowly- as compliance moves to the top of the list of concerns for investors and...
  • Blog Post: For Hedge Fund Investors in the Know, New Regulations May Provide Enhanced Transparency

    Securities regulations have many goals (prevention of misdeeds, market stability, investor protection), however, for those who can navigate the system, new hedge fund regulations will have the effect of increasing transparency for hedge fund investors. While recent moves appear to be primarily aimed...
  • Blog Post: Perils of Side Letters for Hedge Fund Managers and Investors

    Most investors contemplating investing in a hedge fund believe they are presented with a set of fixed terms for their investment. These terms are outlined in the private offering memorandum and appear to apply across the board to all investors. However, careful readers of the offering memo as well...
  • Blog Post: Insider Trading at Hedge Funds: A Risk Area that is Difficult to Address

    Insider trading is an area of risk that hedge fund management finds very difficult to identify and prevent. While the problem has become increasingly prevalent, the tools to be able to assist hedge fund managers have not expanded proportionately. A break-down in personal trust in the industry as...
  • Blog Post: Is Apple a Hedge Fund?

    I don't own any Apple stock, but their announcement about what they're planning to do with their big stockpile of cash caught my attention. Not because I'm going to rush out and buy the stock, but because of Dodd-Frank. My analysis of when fund managers need to register with the Securities...
  • Blog Post: Is Your Hedge Fund Style "Drifting"? Quick, Catch It!

    Hedge fund style "drift" is said to occur when a hedge fund manager strays from their stated investment strategy. The term used to be an esoteric one, used only by professional hedge fund analysts. However, "drifting" is a problem that is lately coming into view more by regulators...
  • Blog Post: 'Finding' Hedge Fund Investors Just Got A Bit More Difficult

    The hedge fund world has always walked a fine line when it comes to attracting new investors. And nowhere has this line been thinner than the one between "finders" and "solicitors" - the parties who act as the middlemen in the investor location process. According to SEC rules...
  • Blog Post: Hedge Funds And Money Laundering

    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...
  • Blog Post: Compliance Technology Now a Necessity for Hedge Funds

    Once viewed as a luxury reserved for only the largest hedge funds, compliance technology has entered the mainstream. The complexity of reporting obligations, combined with the expanded number of hedge fund investment advisers that are now registered with the SEC and CFTC, are the drivers of the increased...
  • Blog Post: Rhode Island Bets Big on Hedge Funds

    Rhode Island has put 14 percent, or $1 billion, of its $7.5 billion in pension fund assets into a form of investment generally considered the exclusive province of sophisticated money managers and wealthy investors: hedge funds. The state is now short selling, leveraging and spread trading in Asian futures...
  • Blog Post: Private Equity Fund Investing in Pot

    A pair of experienced investment bankers are moving into the marijuana business. They've set up a private equity firm that will buy up businesses in the medical marijuana industry and the nascent market for legalized recreational pot. Brendan Kennedy, one of the cofounders of Privateer Holdings,...
  • Blog Post: Government Shutdown Impact on Hedge Funds

    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...
  • Blog Post: Hedge Funds Wrestle with Employee Personal Account Trading Conflicts

    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...
  • Blog Post: Cybersecurity of Hedge Fund Data

    The cybersecurity of hedge fund data is now a front-burner issue for many firms. In the wake of recent NSA leaks, privacy breaches and hacking scandals, both the regulators and the firms themselves have moved this up in the list of concerns. Issues relate to both the integrity of internal hedge fund...
  • Blog Post: Hedge Funds Must Ramp Up Infrastructure to Accommodate Liquid Alts

    Pressures have been mounting on hedge fund managers to hedge their own businesses and diversify away from the hedge fund model itself. Lackluster performance, difficult markets, fees that are perceived as too high, scandals and conflicts of interests are just a few of the factors that are leading managers...
  • Blog Post: Transparency Issues at Hedge Funds Continue

    How much information should be provided to investors about the fund they have invested in? The answer to this question has evolved over time. In the past, limited information was provided on the theory that the manager always knew best and the trading strategy should remain as shrouded as possible in...
  • Blog Post: Diversity Matters for Hedge Funds

    In June, a final inter-agency policy statement establishing joint standards for assessing the diversity and inclusion policies and practices of regulated financial entities was published by the SEC and five other financial regulators. The issuance of this policy statement was a requirement of the Dodd...