I was critical of the Securities and Exchange Commission’s new rule on money market funds. To me it seemed like it was trying to fix a problem that didn’t exist, and in the process made things more complicated. For criticism to be correct, I need data. After review a paper on the Stability of Prime … Read more »
Category: Compliance Programs
Another Real Estate Ponzi Scheme From 2008
The 2008 financial crisis caused many real estate investment funds to run into trouble. Some fund managers stepped over the line hoping to wait out the turmoil and recover. The Securities and Exchange Commission finalized charges against a fund manager who hoped to divert funds to stay liquid during the turmoil. According to the SEC’s … Read more »
LRN’s 2014 Ethics and Compliance Program Effectiveness Report
For the past seven years, LRN has conducted its annual survey of Ethics and Compliance programs in search of benchmarking data, suggestions of leading practices, and trends. In 2012 LRN adopted the Program Effectiveness Index as a tool to determine the impact of compliance programs. The challenge with index is figuring out the difference between … Read more »
Compliance Failures and Performance Measure
Progress Rail is under criminal investigation for failures in its railcar and locomotive repairs operation. Investigators claim that it was charging owners of rail equipment for making unnecessary repairs and replacements. There is also an environmental claim because the investigation indicates that workers were dumping parts in the ocean to hide them from auditors. That … Read more »
Compliance and Dodd-Frank at Four
It’s been four years since the Dodd-Frank Wall Street Reform and Consumer Protection Act was signed into law. President Obama sat down on July 21, 2010 to sign the behemoth of a bill that was the most dramatic change to financial industry in years. Besides the hundreds of pages of text in the law itself, … Read more »
Comply With What?
The starting point for any compliance program is to determine what you are trying to comply with. Every company has some legal requirements or contractual requirements that govern how it operates its business. Every company will place different emphasis on which of those requirements it will put under its compliance program. Every company will operate … Read more »
Bad Actors on Form ADV and Under Rule 506(d)
The Securities and Exchange Commission has layered two tests for bad actors on to private fund managers. On Form ADV, the fund manager will need to disclose bad actor events. Then the second test comes under the new Rule 506(d) that also requires disclosure for bad actors in private placements and a bar for recent … Read more »
Spot the Fraudster
One of the challenges that consumers face when dealing with a financial adviser is what it means to be a “financial adviser.” The terms financial planner, wealth consultant, stockbroker, investment adviser, financial consultant, and others get thrown around, leaving you how that person gets paid for helping you with your money. A fraudster may sling … Read more »
Making Compliance Easier
At PEI ‘s Private Fund Compliance Forum, one attendee asked how to make compliance easier. That caught the room by surprise. If compliance was easy, we would likely would not be at the Forum. But it did get me thinking about ways to make compliance easier. First, compliance is hard because the laws we comply … Read more »
The SEC Says Be Wary of Bitcoin
Bitcoin has been the Dutch Tulips of investment for a few years. So of course that means the fraudsters have latched on. The Securities and Exchange Commission has piled on and issued an Investor Alert: Bitcoin and Other Virtual Currency-Related Investments. This is the second investor alert from the SEC on Bitcoin. The first was … Read more »