Doug Cornelius on compliance for private equity real estate
You create a useful trading model. Get the firm to start using it, then tweak it so you get more compensation. Sounds like a good way to get rich… and to get in trouble. Jian Wu is finding out. The Department of Justice filed wire fraud, securities fraud and money laundering charges against him for…
An investment adviser always has a conflict of interest. An adviser should never say there are no conflicts.You take money from your client for fees. ConflictYou get paid differently depending on the client asset. ConflictYou get paid distribution fees: Conflict If you put in an advertisement that you have no conflicts, an SEC examiner will…
On August 7, 2025, President Trump issued an executive order titled “Democratizing Access to Alternative Assets for 401(k) Investors.” The order asks the relevant federal agencies to clarify the obligations of Employee Retirement Income Security Act plan fiduciaries when considering alternative assets as potential investment options for defined contribution plans. So private funds may end…
Sure. Why not? Help with cash flow and liquidity. Can you charge interest on the deferred fees? Probably not. If the fund documents explicitly allow for interest to accrue on the deferred fees, then sure. I’m not sure I’ve seen many funds that allow this. Of course, you get in the immediate conflict of what…
Before and after Regulation BI, broker-dealers get suitability questionnaires from their clients. Knowing your clients’ risk tolerance, liquidity needs, investment goals, and investment experience are keys to giving good investment advice. Certainly there has been a lot of concern about the changing standard from “suitability” to “best interest.” Rightly so. When I see a Reg…
Compliance Building is a free resource. I publish for me, and share with you, to help the compliance profession. Now I need some of your hard-earned money. https://egifts.pmc.org/PMC/DC0176 I should point out that the money is not for me; It’s for charity. Help me fight against cancer, by raising money for the Dana Farber Cancer Institute. I’m…
I’m not a big fan of these SEC cases involving compliance officers. But if the compliance officer is conducting misdeeds, he or she is going to be subject to discipline. It’s not like the compliance officer was doing compliance and missed something. Last week I had the two cases of compliance officers who faked paperwork…
Financial Crimes Enforcement Network announced its intention to postpone the effective date of the final rule establishing Anti-Money Laundering/Countering the Financing of Terrorism Program and Suspicious Activity Report Filing Requirements for Registered Investment Advisers and Exempt Reporting Advisers and to revisit the scope of this rule at a future date. FinCEN said it anticipates delaying the effective…
Two days in a row of compliance officers making the mistake of faking compliance documents. Yesterday it was a compliance officer who faked compliance reviews. Today, its a compliance officer who faked employee securities transaction approvals. According to the SEC Order, Suzanne Ballek was the Chief Compliance Officer of Inland Investment Advisors, part of the…
The sad case of a compliance officer who faked compliance reviews and the company president who went along. American Portfolio Advisors was subject to an examination by the Securities and Exchange Commission. SEC staff asked for copies of the most recent compliance review pursuant to Rule 206(4)-7. The rule doesn’t require a written documentation of…