Compliance Bricks and Mortar for June 27

These are some of the compliance-related stories that recently caught my attention.

A Committee of Fund Manager Personnel May Not Be Able to Provide the Requisite Consent on Behalf of the Fund for a Principal Transaction by Steve Ganis in Securities Litigation & Compliance Matters

So what constitutes sufficient consent for a principal transaction or an agency cross trade that does not meet the blanket consent exemption? Generally speaking, fund managers may, depending on the circumstances, rely upon a committee of underlying investors or independent third-parties to consent to principal transactions.

What’s the best way to document that training has taken place? by Kortney Nordrum in SCCE’s Compliance & Ethics Blog

It’s a common compliance requirement to train your employees – on safety procedures, regulations, products they are selling, and so forth.  And very often the regulator requires you not just to train but to document your training or confirm understanding.  What is the best way to document that training has taken place?

There are 3 obvious routes:

• Have the instructor take attendance
• Get employees ‘ signatures confirming they have understood training
• Administer a test after the training, so that employees can demonstrate their understanding

Halliburton: U.S. Supreme Court Declines to Overturn Basic, Allows Defendants to Rebut Presumption of Reliance by Kevin LaCroix in The D&O Diary

While the Court’s decision will not alter the securities litigation landscape as much as might have been the case if it had overturned Basic, the Court’s holding that defendants may at the class certification stage seek to rebut the presumption of reliance based on the absence of price impact could have a significant effect on securities litigation. In many cases, plaintiffs may be unable to obtain class certification where in the past they might have been able to have a class certified. In any event, the class certification phase likely will become more costly as the parties dispute the issues surrounding the impact of the alleged misrepresentation on the share price.

Court fight bares SEC insider-trading probe by Kevin McCoy in USA TODAY

SEC investigators are probing whether anyone on Capitol Hill improperly leaked information about the federal Centers for Medicare & Medicaid Services’ final decision on 2014 rates the federal government would pay insurers that offer private Medicare plans.

Formally issued at 4:15 p.m. on April 1, 2013, the rates increased by 3.5%. The surprise decision scrapped the 2.3% rate decline in a preliminary government plan that drew bipartisan congressional opposition.

Approximately 15 minutes before the 4 p.m. market close that day, trading volume and stock prices of some health insurers likely to benefit from the increase “rose precipitously,” SEC attorney Amanda Straub wrote in Manhattan federal court papers filed on Friday.

PEGCC Releases New State and Congressional District Rankings for Private Equity Investment

Private equity firms invested more than $443 billion in U.S.-based companies last year, a 27 percent increase over the previous year, according to the Private Equity Growth Capital Council’s fourth annual investment report, “Private Equity: Top States and Districts.” The analysis, which ranks the top 20 states and congressional districts by investment value and number of investments, found that Texas received the most investment in 2013, topping California, Pennsylvania, New York and Florida.