Posts tagged with: "206"
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3 Oct 2011, 5:21 am by Doug Cornelius
Private equity transactions are not outside the scope of enforcement by the Securities and Exchange Commission. The SEC filed a case against a former principal of an investment adviser that manages private equity funds. The charge is that he “usurped …[a] lucrative investment opportunity in a private company.” At this point, the SEC has only filed for a cease and desist order and has not proven the allegations against Matthew Crisp. Crisp worked for Adams Street Partners, a private equity… [read post]
22 Jun 2010, 5:00 am by Doug Cornelius
With the upcoming requirement that the advisers to private investment funds will need to register with the SEC, I figured it was time to look at some of the requirements that registration will impose. Section 204A of the Investment Advisers Act requires registered investment advisers to “establish, maintain, and enforce written policies and procedures reasonably designed, taking into consideration the nature of such investment adviser’s business, to prevent the misuse … of material, nonpublic… [read post]
3 Apr 2013, 2:33 pm by David Smyth
One of the salient features of the SEC’s enforcement program in recent years has been a dearth of accounting fraud cases.  While those cases used to be the SEC’s bread and butter, and hovered around 200 actions per year, they have dropped off dramatically since 2007, and hit a low of 79 last year.  Only a small part of the drop is attributable to breaking out FCPA cases from the “Financial Fraud/Issuer Disclosure” category.  Where have these cases gone? It is… [read post]
14 Jun 2012, 5:54 am by Doug Cornelius
The Securities and Exchange Commission extended the date by which registered investment advisers must comply with the ban on third-party solicitation in Rule 206(4)-5 under the Investment Advisers Act. The SEC is extending the compliance date in order to ensure an orderly transition. Since solicitors will need to registered as an investment adviser or a broker/dealer or a municipal advisor. Part of the rule was reliant on FINRA coming up with a rule to meet the requirements under the definition of… [read post]
14 Apr 2011, 5:00 am by Doug Cornelius
In it’s prohibition against fraud, deceit and manipulation, Section 206 of the Investment Advisers Act is strict. There is no requirement of intent. You can argue that you didn’t mean to mean to commit fraud. That may affect whether you get referred to enforcement instead of merely getting hit with a deficiency letter or an injunction. Under common law there us generally some requirement of intent. That is not so true under securities laws. In SEC v. Capital Gains Research, Inc. 375 U.S. 180… [read post]
25 Apr 2011, 5:00 am by Doug Cornelius
Section 206 of the Investment Advisers Act prohibits fraud, deception or manipulation, regardless of whether the fund manager is registered. Once registered, Rule 206(4)-1 imposes additional restrictions on advertising that the SEC has determined would be fraudulent, deceptive or manipulative. The first item on the list of fraudulent, deceptive or manipulative practices is testimonials, which I wrote about earlier. The second item in the advertising rule is a prohibition on using past performance… [read post]
19 Apr 2011, 5:00 am by Doug Cornelius
Section 206 of the Investment Advisers Act prohibits fraud, deception or manipulation, regardless of whether the fund manager is registered. Once registered, Rule 206(4)-1 imposes additional restrictions on advertising that the SEC has determined would be fraudulent deceptive or manipulative. The first item on the list of restrictions is testimonials. This prohibition reflects the concern that the experience of one customer is not necessarily typical of the experience for all customers. Merely… [read post]
7 Feb 2013, 5:20 am by Doug Cornelius
The Securities and Exchange Commission filed charges against a fund manager and its subadviser for their extensive use of derivatives. From April 2007 through October 2008, the Fiduciary/Claymore Dynamic Equity Fund engaged in derivative strategies to supplement the Fund’s primary investment strategy. But the Fund failed to include adequate disclosure about the risks to the Fund arising from the Fund’s use of derivatives, either in its annual report or in an amended Fund registration… [read post]
7 Feb 2013, 5:20 am by Doug Cornelius
The Securities and Exchange Commission filed charges against a fund manager and its subadviser for their extensive use of derivatives. From April 2007 through October 2008, the Fiduciary/Claymore Dynamic Equity Fund engaged in derivative strategies to supplement the Fund’s primary investment strategy. But the Fund failed to include adequate disclosure about the risks to the Fund arising from the Fund’s use of derivatives, either in its annual report or in an amended Fund registration… [read post]
13 Apr 2011, 5:00 am by Doug Cornelius
Section 206 of the Investment Advisers Act prohibits fraud, deception or manipulation, regardless of whether the fund manager is registered. Once registered, Rule 206(4)-1 imposes additional restrictions on advertising that the SEC has determined would be fraudulent deceptive or manipulative. So what is an advertisement for purposes of the rule 206(4)-1: “[A]ny notice, circular, letter or other written communication addressed to more than one person, or any notice or other announcement in any… [read post]
26 Sep 2011, 5:00 am by Doug Cornelius
The Securities and Exchange Commission brought charges of securities fraud for concealing a significant error in the computer code of the quantitative investment model. I found this case to be interesting because it was not flawed human decisions, but flawed computer decisions. However, we still live in the age where computers do what we tell them to do. So, if the computer is doing something wrong, then a person is behind it. Barr M. Rosenberg developed complex automated models and an… [read post]
12 Apr 2011, 5:00 am by Doug Cornelius
As a private fund manager registering as an investment adviser, you get new limitations on how you market and sell interests in your funds. It all starts with Section 206 of the Investment Advisers Act: It shall be unlawful for any investment adviser, by use of the mails or any means or instrumentality of interstate commerce, directly or indirectly– 1. to employ any device, scheme, or artifice to defraud any client or prospective client; 2. to engage in any transaction, practice, or course of… [read post]
3 Feb 2012, 5:58 pm by Lewis Gainor
Illinois is one of the toughest states when it comes to a young person’s driving privileges. In addition to the Zero Tolerance law, which suspends a person’s driver’s license for consuming alcohol before age 21, the Secretary of State has multiple laws it can use to take away your license. In fact, a driver who is younger than 21 years old can suffer a serious penalty for moving violations even where no alcohol is involved. As a general rule, a driver who is younger than 21 years of age will… [read post]
20 Jan 2010, 5:00 am
Think Before You Tweet! What are the challenges for broker/dealers and investment advisers trying to use social networking sites? Complinet hosted a webinar on this topic with Clifford Kirsch from Sutherland Asbill & Brennan LLP and Debbie Corej, Vice President, Compliance - Insurance Division, Prudential. Clifford started the discussion by pointing out the need to think about who is using these communication tools and what they are using them for. There is not a single source for the legal… [read post]
20 Apr 2011, 5:00 am by Doug Cornelius
Investment advisers, and therefore fund managers once they register as investment advisers, are limited in how they advertise. Section 206 of the Investment Advisers Act already prohibits fraud, deception or manipulation, regardless of whether the fund manager is registered. Once registered, Rule 206(4)-1 imposes additional restrictions on advertising that the SEC has determined would be fraudulent deceptive or manipulative. The first item on the list of restrictions is testimonials. This… [read post]
21 Apr 2011, 5:00 am by Doug Cornelius
Section 206 of the Investment Advisers Act prohibits fraud, deception or manipulation, regardless of whether the fund manager is registered. Once registered, Rule 206(4)-1 imposes additional restrictions on advertising that the SEC has determined would be fraudulent, deceptive or manipulative. The first item on the list of fraudulent, deceptive or manipulative practices is testimonials, which I wrote about earlier. The second item in the advertising rule is prohibition on using past performance in… [read post]
27 Jun 2013, 12:13 pm by David Smyth
Several weeks ago I discussed what I think is the great likelihood that investment advisers are about to be subject to more regular periodic exams in the coming years.  That train could get derailed – crazier things have happened – but it seems likely to me that investment advisers are soon going to have to open their books to regulators with a lot more frequency.  If you’re an investment adviser and that does happen, are you ready?  Foxhall Capital Management… [read post]
21 May 2010, 7:39 pm by CapitolHillIte
Call Olivie Law now for a one hour consultation with an immigration lawyer, Andre Olivie. Telephone: (206) 724-1940 [read post]
20 Nov 2012, 2:00 am by Kara OBrien
The following is our monthly featured post from Terry Nelson and Peter Fetzer of Foley & Lardner filling you in on the latest developments affecting investment advisers, hedge funds, and mutual funds. Highlights this month include: Non-Enforcement Matters Principal Trade Rule Extension for Investment Advisers/Broker-Dealers Mutual Fund Boards and Communications With Auditors Mutual Fund Directors and Proxy Statement Disclosure Enforcement Matters SEC Charges Another… [read post]
6 Feb 2013, 8:06 am by Kenan Farrell
Malibu Media, LLC v. John Doe Court Case Number: 1:13-cv-00206-TWP-MJDFile Date: Tuesday, February 05, 2013Plaintiff: Malibu Media, LLCPlaintiff Counsel: Paul J. Nicoletti of Nicoletti & Associates PLLCDefendant: John DoeCause: Copyright InfringementCourt: Southern District of IndianaJudge: Judge Tanya Walton PrattReferred To: Magistrate Judge Mark J. Dinsmore View this document on Scribd [read post]