Many of you, like me, are back from vacation or a Labor Day barbecue. I’m still washing sand out of my shoes and rubbing aloe on my skin that was in the sun too long. After being away from the office, my email box is filled with messages that should be returned, issues that need … Read more »
Category: Compliance Programs
On line portals for fundraising
As part of the updates on private placements, the Securities and Exchange Commission granted a no-action letter to Citizen VC, an online venture capital firm. The main question was whether the firm was creating “substantive, pre-existing relationships” with prospective investors through its website. The firm wanted to avoid a result that its offers & sales … Read more »
A Win for Compliance Officers
Judy Wolf did a bad thing. During an insider trading investigation she fudged some documents. The Securities and Exchange Commission investigated the insider trading matter and Ms. Wolf’s log of her review. The fudging was discovered. She was fired and the SEC brought an enforcement against her. There is some good news from that bad … Read more »
Dodd-Frank Act Compliance Cost for Private Funds
Are Dodd-Frank Act compliance costs forcing smaller private investment fund advisers out of the market? Wulf Kaal, Associate Professor at the University of St. Thomas School of Law, decided to take a look at the data and see. It should come to no surprise that the answer is likely: yes. The analysis in this paper … Read more »
Pay to Play Rule In Effect on July 31
The Securities and Exchange Commission announced the compliance date for the ban on third-party solicitation pursuant to the Pay-to-Play rule: July 31, 2015. Rule 206(4)-5 prohibits an investment adviser from providing compensated services to a government entity, following a political contribution to certain officials of that entity. Rule 206(4)-5 became effective on September 13, 2010 … Read more »
Compliance, Cycling and the Tour de France
For me, July starts with the red, white and blue, then quickly turns to yellow. The yellow jersey worn by the overall leader of the Tour de France. I’ve been a big fan of the Tour de France for the past decade and a half. I admit that it was the success of Lance … Read more »
Weekend Reading: A History of the World in Sixteen Shipwrecks
Shipwrecks are tragic, but have been a part of human history since we started making ships. There are an estimated three million ships sitting on the bottom of the oceans, seas, lakes, and rivers of the world. Of that staggering number, Stewart Gordon picked sixteen to tell the story of human history. A History of … Read more »
How to Allocate Broken Deal Expenses After the KKR Case?
The Securities and Exchange Commission charged Kohlberg Kravis Roberts & Co. (KKR) with misallocating more than $17 million in “broken deal” expenses to its private equity funds as a breach of KKR’s fiduciary duty. The SEC felt that KKR should not have charged all of those broken deal expenses to the Fund. But how should … Read more »
Allocation of Broken Deal Expenses
The Securities and Exchange Commission charged Kohlberg Kravis Roberts & Co. (KKR) with misallocating more than $17 million in “broken deal” expenses to its private equity funds. The SEC found this to be a breach of KKR’s fiduciary duty. An SEC investigation found that from 2006 to 2011, KKR incurred $338 million in broken deal … Read more »
SEC Loosens the Standards in Trade Monitoring
One of the more difficult aspects of a private equity fund when it registers as an investment adviser is dealing with the Rule 204A-1 requirement of monitoring employee trading. The SEC recently issued guidance on the applicability to managed accounts when there is no direct or indirect influence or control. The Guidance focuses on the … Read more »