These are some of the compliance-related stories that recently caught my attention. The Financial industry – Life is Getting Tough by Michael Volkov in Corruption, Crime & Compliance In recent statements from the Justice Department and regulatory officials, prosecutors and regulators have warned the industry that individuals may be prosecuted in the future for money … Read more »
Category: Compliance Programs
SEC Compliance Outreach Program National Seminar
The SEC’s Office of Compliance Inspections and Examinations (OCIE), Division of Investment Management, and the Asset Management Unit of the Division of Enforcement jointly sponsor the compliance outreach program. On January 30, 2014, there was a national meeting. These are my notes. Welcoming Remarks from Chair Mary Jo White Investors and the SEC relies on … Read more »
Due Diligence for Alternative Investments
The Securities and Exchange Commission published a new risk alert on investment advisers and alternative investments. It’s a rambling piece that spends most its time laying out the OCIE’s observations on due diligence practices. To the extent there is any focus, it’s focus is on the perspective of advisers to pension funds and managers of … Read more »
Fees and Conflicts
I sat down with a few people last week to discuss various fee structures with fund managers and investment advisers. One fee was raised as potentially problematic. “I’m not sure if this fee is a conflict.” My thought is that every fee is an inherent conflict. You are taking money from the fund investor or … Read more »
Volker Rule and Real Estate Funds
Five regulatory agencies adopted the final rules that implement the Volcker Rule, a provision of the Dodd-Frank Wall Street Reform and Consumer Protection Act. It’s a big, complicated, ugly rule that will drive compliance officers at banks crazy trying to implement. Have fun reading all 964 pages. The text of the regulations themselves only run … Read more »
Compliance Program Failure
The SEC slapped a fund manager and its out-sourced CCO. The main charge was engaging in undisclosed principal transactions. Beyond that obvious conflict issue, the order has some interesting statements about failures in the compliance program. Parallax Investments, LLC, a Houston based firm, registered with the SEC as investment adviser in 2010. It also had … Read more »
Some Relief for a Fund Manager Under the Political Contributions Rule
SEC Rule 206(4)-5 for investment advisers and fund managers limits the ability of a firm’s employees to make political contributions. It’s a nasty rule. Violation of the rule does not require any bad intent. The breadth of affected political candidates is long, diverse, and hard to discover. Anthony Yoseloff worked at Davidson Kempner Capital Management … Read more »
JOBS Act 2.0
It was an unusual show of bipartisan support when the original JOBS Act was passed in the Spring of 2012. Congress is following in the footsteps of movie studios and looking to produce a sequel. Financial Services Committee Chairman Jeb Hensarling has promoted a group of bills that he thinks will comprise the JOBS Act … Read more »
The Monsters of Compliance – Monster Mash
I was working in the lab late one night When my eyes beheld an eerie sight For my monster from his slab began to rise And suddenly to my surprise He did the mash He did the monster mash The monster mash It was a graveyard smash He did the mash It caught on in … Read more »
The Monsters of Compliance – Dracula
The pumpkins and garish Halloween decorations are out on my front lawn. With the Halloween season upon us, my mind has become stuck on movie monsters and been mixed with compliance. This is the terrible result. Vampires have taken many forms, mixing mythologies, weaknesses and desires. There is the regal version played by Bela Lugosi, … Read more »