These are some of the compliance-related stories that recently caught my attention.
Your next PR battle is brewing in Private Funds Management
Last week, the California Public Employees’ Retirement System (CalPERS) released carried interest data that several media outlets were quick to spin as private equity somehow being more expensive than investors had realized, and that fees charged for outsized performance were egregious (when in fact they were shown to be below industry standards). It was yet another reminder that often the reporters writing such stories don’t understand the core concepts and structures of the asset class. [More…]
Making It Harder to Prove White-Collar Crimes by Peter J. Henning in the NY Times’ DealBook
But one provision tucked in the legislation could have a significant impact on prosecuting regulatory offenses, the type often pursued against businesses and corporate managers. The law would require that if a federal criminal offense did not specifically set forth the intent needed to establish a violation, then prosecutors must show the defendant’s state of mind was “knowing.” A further requirement is that “if the offense consists of conduct that a reasonable person in the same or similar circumstances would not know, or would not have reason to believe, was unlawful, the government must prove that the defendant knew, or had reason to believe, the conduct was unlawful.” [More…]
Is the City Link verdict a win for the industry? in Private Equity International
Former City Link directors must have breathed a sigh of relief. Last week a UK court found them not guilty of failing to notify the government of upcoming redundancies following the collapse of the company. [More...]
Investment Advisers Don’t Need Mystery Monitors by Norm Champ in the Wall Street Journal opinion section
Mandating examinations of investment-management firms by third parties presents all of the risks of these earlier failed attempts to outsource government power. These examinations would cost investment managers, and ultimately their clients, a great deal of money. The firms conducting the examinations would have a guaranteed revenue source with little incentive to produce quality exams or keep costs down. As with proxy advisory firms, the examining firms could develop their own agendas for examinations that have nothing to do with safeguarding investors. [More…]
Fairness of SEC Judges Is in Spotlight by Jean Eaglesham in the Wall Street Journal
The SEC won against 86% of defendants in contested cases in its own courts from October 2010 through September 2015, according to an updated analysis by The Wall Street Journal—significantly higher than the agency’s 70% win rate in federal court. A page-one Wall Street Journal article in May reporting the agency’s different win rates has since been cited in numerous legal challenges. [More…]
U.S. and UK risk assessments differ on real estate-related AML by Alex Zerden and Sarah Freuden in the FCPA Blog
The United States and United Kingdom recently published comprehensive money laundering risk assessments through the UK’s National Risk Assessment and the U.S.’s National Money Laundering Risk Assessment. The UK’s National RiskAssessment (NRA) and U.S.’s National Money Laundering Risk Assessment (NMLRA) provide insight into anti-money laundering vulnerabilities from real estate in two of the five largest global economies. [More…]