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Conflicts of interest are at the center of two administrative proceedings recently instituted by the SEC. One involved the failure to adequately disclose the conflict. The other focuses on a failure to institute appropriate supervisory procedures for...
The Commission prevailed in another jury trial this week, securing a favorable verdict against a registered investment adviser, Sage Advisory Group, LLC, and its principal, Benjamin Grant. SEC v. Sage Advisory Group, LLC, Civil Action No. 1: 10-cv-11665...
One of the struggles with implementing a compliance
program for a private equity fund is that the Investment Advisers Act is targeted at retail operations
dealing with relatively liquid investments. Neither fits well with the private
equity model of...
Alternative investment manager Nikolai Battoo appeared to be the all-American success story. He began as a Florida cook and rose to manage over a billion dollars in assets. He attracted investments from investors across the globe. He claimed to have successfully...
With Dodd-Frank 's elimination of the 15
client exemption , thousands ( my guess ) of private fund managers will
need to register with the Securities and Exchange Commission as investment advisers to their funds . For alternative
The Commission has brought a series of cases focused on undisclosed conflicts of regulated entities. A number of those cases centered on undisclosed fee and compensation arrangements. In its most recent case the agency went one step further, charging...
Investment adviser Ismail Elmas pleaded guilty this week to an information charging one count of wire fraud. U.S. v. Elmas, No. 1:14-cr-00358 (E.D. Va.). This action is the latest is a series cases centered on investment frauds in which the adviser or...
On June 13, 2011, in Janus
Capital Group, Inc. v. First Derivative Traders , 1
the U.S. Supreme Court held that a mutual fund investment adviser and
administrator could not be held liable under federal securities laws for
alleged misrepresentations in...
The SEC has released its proposed changes to Form ADV to
better deal with private fund registration and the exempt, but reporting
required of venture capital funds: Release
The Securities and Exchange Commission is proposing new
The SEC announced another new initiative. It is known as the “Distribution-in-Guise Initiative.” This initiative focuses on preserving the assets of mutual funds for its shareholders, apparently by ensuring that fund managers and advisers...
Conflicts of interest involving market professionals continue to be a focus of SEC enforcement. In many cases the conflict is uncovered by the inspection staff, OCIE. This time, however, the information came from an article published by the Wall Street...
For private fund managers, one troubling aspect of Form
ADV had been the calculation of "assets under management" in item 5.F. If
securities are less than 50% of the portfolio then the portfolio would not be a
The Commission filed another settled action based on undisclosed conflicts involving an investment adviser. In this proceeding Respondents, principals of the adviser, failed to disclose a fee splitting arrangement with an executing broker. In the Matter...