These are some of the compliance-related stories that recently caught my attention.
Star Wars Week Part I – How do You Evaluate a Risk Assessment? by Tom Fox in the FCPA Compliance Report
Today I begin a series of Star Wars themed blog posts to celebrate the upcoming release of the next entry in the Star Wars franchise, Episode VII – The Force Awakens. Please note that I will only use the first three movies, now known as Episodes IV-VI, for the themes this week. So if you are a millennial and the prequels are your Star Wars sorry but you can write about them as the first three are my Star Wars movies.
Star Wars Week Part II – The Empire Strikes Back – Levels of Due Diligence
Star Wars Week, Part III – VI – Return of the Jedi-Moderating Training
Star Wars Week Part IV – Disruption Innovation in Compliance
Five Predictions for 2016 in Private Funds Management
SEC wrist-slaps real estate GPs: After completing a ‘sweep’, or coordinated inspection review, the US Securities and Exchange Commission (SEC) needs about two years to evaluate its findings before bringing enforcement action. With private equity firms, a sweep was finished in 2012 that led to more than a dozen enforcement cases in 2015 and more expected next year. A similar sweep of real estate advisors began a year or so after the private equity exams started, so if the timeline stays true, 2016 will be when real estate enforcement cases begin coming through. Already senior SEC officials have sounded the alarm on real estate GPs charging fees for certain ancillary services like property management without proper disclosure. [More…]
Section 12(g)(1)(A) – How The SEC Is Putting Words In Congress’ Mouth by Keith Paul Bishop
That, however, is not what Section 12(g)(1)(A) literally states. Congress was quite specific. The shareholder trigger is either 2,000 persons or 500 persons who are not accredited investors. There is no “or more” in the statute. Read literally, an issuer would have to have a class of equity security (other than an exempted security) held of record by either exactly 2,000 persons or 500 non-accredited persons.
Surely, Congress did not intend such an odd rule. It must have meant, as the SEC states, 2,000 or more or 500 or more. [More…]
Regulation Crowdfunding: The Long Wait Is Over, But Is Equity Crowdfunding D.O.A.? by by Sam Effron and Kristin Gerb in Mintz Levin’s Securities Matters
What we think will make Reg. CRWD offerings particularly burdensome and expensive, however, will be the compliance requirements for issuers and intermediaries. The SEC has created new “Form C”, which issuers utilizing Reg. CRWD will be required to file for all filings related to a Reg. CRWD, including an initial offering statement (and updates thereto) and ongoing annual reports. The initial Form C will need to be filed at least 21 days before any offering commences, and the disclosure requirements for a Reg. CRWD offering are extensive. [More…]
CFTC Brings First Insider Trading Case by Bruce Carton in Compliance Week
Until last week, the CFTC had never been brought an insider trading case for commodities trading. Indeed, the only example of insider commodities trading that most lawyers (or anyone else) could probably point to would be the ill-fated effort of the Duke brothers in the Eddie Murphy movie Trading Places.[More…]