As a general rule, investment adviser cannot charge performance fees. Section 205(a)(1) of the Investment Advisers Act of 1940 generally prohibits an investment adviser from entering into, extending, renewing, or performing any investment advisory contract that provides for compensation to the adviser based on a share of capital gains on, or capital appreciation of, the … Read more »
Year: 2011
How Close Should You Come to Crossing the Line?
It’s clearly wrong to break the law. How close should you come to the limit of what is legal and what is illegal? Let’s hear from a federal prosecutor: [I]f you are single-mindedly focused on walking the line, you are bound to end up afoul of regulators, and God forbid, criminal prosecutors. Even more dangerous … Read more »
Another FCPA Opinion Procedure Release on Corporate Hospitality
The Department of Justice released the latest Opinion Procedure Release on the Foreign Corrupt Practices Act. The releases are great tool to help you figure out if a proposed corporate action could lead to an enforcement action. Anyone with an interest in the FCPA looks to the existing body of opinion releases as a way … Read more »
Compliance Bits and Pieces for July 8
These are some recent compliance-related stories that caught my eye. Lessons of the Financial Crisis: The Dangers of Short-Termism by Sheila C. Bair, Chairman of the Federal Deposit Insurance Corporation, in the Harvard Law School Forum on Corporate Governance and Financial Regulation [I]n my opinion, the overarching lesson of the crisis is the pervasive short-term … Read more »
Yes, the SEC Wants Real Estate Fund Managers to Register
After six months baking in the oven, the new Form ADV is ready. (To be more precise, the new Part 1 is ready. Part 2 has been sitting on the table for almost a year.) Form ADV still calls for real estate fund managers to register as investment advisers Earlier I had pointed out how … Read more »
Real Estate Fund Managers and the CFTC
Many real estate fund managers, used to the lack of regulatory oversight, are wrestling with the implications of Dodd-Frank. One of the biggest sources of hand-wringing is whether to register as an investment adviser given the removal of the 15 clients exemption from the Investment Advisers Act. Another agency is potentially making regulatory changes leading … Read more »
The First Days of the UK Bribery Act
It’s a been a few days since the UK’s Bribery Act became effective, making some questionable corporate behavior become clearly illegal. There have been thousands of news stories, legal alerts, and dire warnings about the line in the sand drawn on its date of effectiveness, July 1. Now, there is a bit a waiting, a … Read more »
Fourth of July and Compliance
What better way to celebrate the independence of the United States than by taking the day off from work, grilling meat, and watching stuff blow up. In colonial Boston, official proclamations were read from the Old State House balcony, looking down State Street towards Long Wharf. Each July 4th, the Captain Commanding of the Ancient … Read more »
Compliance Bits and Pieces for July 1
These are some compliance-related stories that caught my eye. Okay, so this first one is not about compliance, but about the Tour de France that starts on Saturday morning for its three week race across France. Top 10 Reasons Geeks Should Love the Tour de France in Wired’s GeekDad. Fraud in Commercial Real Estate: Tips … Read more »
Insider Trading: A Dirty Business
One of the major tactics of hedge funds is to “arbitrage reality”, operating with a better understanding of a company and its stock price than other participants in the market. In a legitimate operation, that means lots of research. On the wrong side it means getting inside information about a company’s earnings, upcoming deals, and … Read more »