Doug Cornelius on compliance for private equity real estate
The SEC’s Office of Compliance Inspections and Examinations issued a new Risk Alert: Observations from Examinations of Investment Advisers Managing Private Funds. OCIE highlights three areas of noncompliance in the Risk Alert: conflicts of interest, fees and expenses, and misuse of material nonpublic information. OCIE lays out some of the conflicts that are particular to … Read more »
Early this year, the SEC’s Office of Compliance Inspections and Examinations announced its 2020 examination priorities. One item was “Risk, Technology, and Industry Trends.” One risk mentioned was LIBOR transition. [A]s our registrants and other market participants transition away from LIBOR as a widely used reference rate in a number of financial instruments to an … Read more »
Commissioner Robert J. Jackson Jr. stepped down from the SEC when his term expired in February, 2020. President Trump had identified his replacement to serve on the Securities and Exchange Commission: Caroline Crenshaw. Ms. Crenshaw currently serves in the Army JAG Corps and as senior counsel to the SEC. When she first joined the SEC … Read more »
I’m sure many people are surprised at the decision from the Supreme Court that federal employment discrimination law protects gay and transgender employees. Title VII of the Civil Rights Act of 1964 prohibits employment discrimination “because of sex.” Even if Congress did not have discrimination based on sexual orientation or transgender status in mind when … Read more »
The vast majority of private funds use the audited financial statements alternative for compliance with the Custody Rule. Fund managers have custody of the fund assets. Fund investors typically demand audited financial statements from their fund managers. So the audited financial statement work well with the Custody Rule and provides some third-party verification that the … Read more »
Part of a private equity fund’s investment strategy is getting a seat at the table for a company they own. When that company’s shares also publicly traded, there are heightened compliance concerns. The fund’s management representative is likely to end up with material non-public information. The compliance challenge is to prove that the information does … Read more »
The Securities Exchange Commission followed up on whistleblowers’ complaints against TCA Fund Management for inflating the value of the assets in its Global Credit Master Fund. In January, investor redemption requests exceeded the liquidity of the fund and it eased operations. The SEC complaint against TCA Global alleges that TCA was booking fees before they … Read more »
There is no greater villain right now that fraudsters trying to profit from the COVID-19 pandemic. The Securities and Exchange Commission is more than willing to go after these bad guys. Trading Suspension According to speech last week by Steven Peiken, the SEC’s Co-Chief of Enforcement, the SEC has suspended trading in the securities of … Read more »
When using a track record in marketing materials, compliance officers will focus on the numbers and how they are used to portray prior results. The Securities and Exchange Commission will also scrutinize these results when they inevitably stop by to exam registered fund managers. Keeping the track record straight is even more difficult for a … Read more »
I hope you and your family are staying healthy during this pandemic. We are in a time of great distress. Our health and our economy are at risk. Our country is dividing itself over the correct response. It’s been weeks since I’ve published a blog post. I’m trying to adapt to constantly working at home. … Read more »