Section 16(a) of the Exchange Act and the rules promulgated thereunder apply to every person who is the beneficial owner of more than 10% of any class of any equity security of a public company, and any officer or director of a public company. The Securities and Exchange Commission announced a sweeping group of charges … Read more »
Category: Compliance Programs
Do You Need to Know Enforcement Cases for Compliance?
Are you familiar with SEC investigations pertaining to the following companies? Aladdin Capital Diamondback Capital Liquidnet Paradigm Capital SAC Capital Galleon Capital I admit that I only recognized SAC Capital and Galleon Capital. In a recent survey about half of alternative investment managers said that they were also familiar with those two cases. Half said … Read more »
Dog Days of Summer
It’s time for some vacation. I may lay around on the porch and not think much about compliance. Don’t expect any posts for the next few days. Read more »
The Stability of Prime Money Market Funds
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 »
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 »