Last week there was a last minute extension of the compliance date to changes to Form PF. That seemed relatively straightforward. The detailed data and parsing of the data and reporting of the data is a lot for the large hedge funds and other private funds that have to do quarterly reporting. It’s a lot…
Author: Doug Cornelius
You can find out more about Doug on the About Doug page
De-Regulation from the SEC
It should come as no surprise that the current Securities and Exchange Commission under Chair Atkins would retreat from the rule-making of the SEC under Chair Gensler. We’ve seen it with the rapid retreat on crypto. Last week the SEC formally withdrew 14 proposed rule-makings. Happy to see the Safeguarding Advisory Client Assets proposal go…
FCPA Comes Back From the Dead
President Trump signed an executive order in February that paused all of the Department of Justice investigations under the Foreign Corrupt Practices Act. Perhaps lesser noticed was that the pause was to allow a review of enforcement policies. That review has happened and new guidelines are out. According to the memorandum, the Justice Department will resume investigating FCPA…
The One with Uncertain Fees
An essential element of an advisory agreement is the fee schedule. The biggest conflict every advisor has is fees. The advisor is literally taken cash from their clients. So, it’s essential that the advisor and the client are very clear about the fee calculation. David A. Nagler and his firm, New Line Capital, LLC, stand…
Rising Backlash at the Killing of the Corporate Transparency Act
At the end of March, FinCEN published an interim final rule that removes the beneficial ownership reporting requirements for U.S. companies and limits it to only those entities that are formed under the law of a foreign country and that have registered to do business in any U.S. State or Tribal jurisdiction. Comments are flowing in…
The Danger of Block Trading Accounts
Cherry-picking and block trading accounts go hand in hand. The most recent firm to be found doing this is North East Asset Management and its principal Greg Zandlo. According to the SEC order, the firm had block trading account at an unaffiliated brokerage firm. This allowed the firm to place purchase and sale orders for…
SEC Report on Beneficial Ownership Concentration and Fund Outcomes for Hedge Funds
Ever wonder what the Securities and Exchange Commission does with Form PF data? The SEC’s Division of Economic and Risk Analysis just published a paper analyzing beneficial ownership concentration and fund outcomes: Beneficial Ownership Concentration and Fund Outcomes for Qualifying Hedge Funds. Specifically, DERA looked at Form PF question 15 that asks what percentage of…
The MCAs Are Crankin’
I’ve now seen the best sales pitch for investors in a Ponzi scheme “Yo Homie! the MCAs are crankin!” delivered to an “investor” on Skype. This message came from Patch Baker. The MCAs are Merchant Cash Advances. That Skype chat is printed in paragraph 111 in the complaint against Mr. Baker and Joel J. Natario…
Safeguard of Your IRA Was Not So Safe
The Securities and Exchange Commission obtained final judgments against Safeguard Metals and its principal, Jeffrey Ikahn. The SEC charged Safeguard and Ikahn with acting as unregistered investment advisers by persuading investors to sell their existing securities, transfer the proceeds into self-directed Individual Retirement Accounts, and invest the proceeds into gold and silver coins provided by…
The One Without an Anchor
One legal question that has renewed interest over the past few years is “what is a security?” Crypto lovers will tell you that their stuff is not securities. It all goes back to the definition of “security” and the less conventional term within that definition of “investment contract.” The Howey test focuses on that term…