Doug Cornelius on compliance for private equity real estate
These are some of the compliance-related stories that recently caught my attention. Alex Oh Named SEC Director of Enforcement Washington D.C., April 22, 2021 — The Securities and Exchange Commission today announced that Alex Oh has been appointed Director of the Division of Enforcement. Oh was most recently a partner at Paul, Weiss, Rifkind, Wharton … Read more »
In connection with Securities and Exchange Commission’s new Marketing Rule, I’m expecting the SEC to withdraw a bunch of the no-action letters that address advertising by registered investment advisers. For example, the Clover no-action letter doesn’t seem to fit with the new Marketing Rule and will likely have to be withdrawn to avoid confusion. The … Read more »
These are some of the compliance-related stories that recently caught my attention. U.S. Senate votes 53-45 to confirm Gary Gensler as Biden’s SEC chiefKatanga JohnsonReuters “Gary Gensler has the perfect mix of market expertise, regulatory experience and commitment to the public interest to be an outstanding SEC Chairman,” said Barbara Roper, chief investor advocate at … Read more »
To pull the pieces together, private funds are exempt from the Investment Company Act under Section 3(c)(1) or Section 3(c)(7). Under (1) the fund is limited to 100 investors. Under (7), there is no limit on the number of investors, but the investors have to be “Qualified Purchasers.” The definition of “qualified purchaser” in Section … Read more »
The Securities and Exchange Commission’s Division of Examinations released a Risk Alert on Compliance Issues Related to Suspicious Activity Monitoring and Reporting at Broker-Dealers. While it spent most of the publication laying out the vague requirements of reporting suspicious activity, it took a sharp turn and listed six types of activities that the SEC would … Read more »
SPACs are the current tulips of the markets. Everyone wants a piece of one. Celebrities are joining the rush. As noted in the title, Shaq has one. Actually Shaq is on his second SPAC. Almost 250 SPAC IPOs were completed in 2020, raising total gross proceeds of approximately $75 billion That was about half of … Read more »
Most investment advisers filed their form ADVs last week, before the March 31 filing deadline. That didn’t stop the Securities and Exchange Commission from publishing a new FAQ about Form ADV on April 6. Hopefully you got it right. There has been some questions about office locations that need to be disclosed on Form ADV … Read more »
The Securities and Exchange Commission finally published the new Marketing Rule for investment advisers. Based on the publication date, it becomes effective on May 4. The compliance date is November 4, 2022. A frequently asked question is whether you can slowly wade into the standards of the new rule or do you have to do … Read more »
Douglas Elstun failed his clients in two ways. He over charged them and he put them into inappropriate investments. Mr. Elstun invested some of his clients’ money in daily leveraged ETFs, which deliver multiples of short-term performance of a stock index. He also invested some clients in inverse ETFs which are designed to deliver the … Read more »
Ettro Capital developed real estate. It’s principal, Peter Ettro must have thought that using a private fund to raise some of the capital to finance the investments would be a good idea. He raised over $4 million from 13 investors in ECM Opportunity Fund. The problem is that he made some big fundraising mistakes. The … Read more »