Doug Cornelius on compliance for private equity real estate
Alain Lille, CEO of Petronian Industries is not happy with the new government. He wants to protect his investment in the country of Petronia. His oil firm deployed a great deal of capital looking for oil in Petronia and had a contract with the government for production. A roadblock appeared in last year’s election. The … Read more »
One of the 2018 exam priorities for the Securities and Exchange Commission is “matters of importance to retail investors.” The SEC has found many problems with advisers selling their clients higher cost share classes of mutual funds that paid the adviser a fee. It’s not that a registered investment adviser can’t take that 12b-1 fee. … Read more »
PwC released the results of its latest State of Compliance survey. In this seventh iteration, PwC polled 825 risk and compliance executives worldwide about their organizations’ compliance polices and procedures, training, monitoring and technology. Only 17% said they are very satisfied with the effectiveness of their compliance programs. Another 45% said they were somewhat satisfied. Personally, … Read more »
With the statutory changes from Dodd-Frank, the Securities and Exchange Commission started gathering basic information about private fund managers and their funds on Form ADV. The SEC increased that information flow by requiring Form PF. Unlike Form ADV, Form PF provides detailed information about the private fund’s activities and performance. That left many reluctant to … Read more »
Years ago we had heard that the Securities and Exchange Commission was looking at issues related to group purchasing agreements with private equity portfolio companies. A case has been announced. The SEC brought action against WCAS Management which runs the Welsh, Carson, Anderson & Stowe private equity funds. According to the order, WCAS entered into an … Read more »
Last week, the SEC’s office of Compliance Inspections and Examinations released a risk alert on Most Frequent Advisory Fee and Expense Compliance Issues Identified in Examinations of Investment Advisers. It was a bit shocking. Shocking mostly because the issues are mostly mechanical procedural errors that were contrary to the investment advisory agreement: Using a different … Read more »
For those of us working with registered investment advisers, the deadline for filing Form ADV is quickly approaching. I’ve heard a few people struggling to classify their clients. I put together this chart to help me think about it. With the recent changes to Form ADV, I see the SEC carving client accounts … Read more »
BMW issued a voluntary recall of all BMW i3 electric cars ever sold in the U.S. and has sent a stop-sale order to its U.S. dealers for any new or used i3 vehicles. There have only been 30,000 sold. That’s not very many, but it’s all of them. The reason is a “compliance issue” with … Read more »
When Bitcoin was rapidly increasing in value, there were lots of people looking to invest in that space. The SEC has repeatedly raised concerns about fund sponsors creating a fund or ETF focused on cryptocurrency. In a letter to the Investment Company Institute and Securities Industry and Financial Markets Association, the SEC said don’t even think … Read more »
Private Fund CCOs have been focused on the disclosure and reporting of fund expenses for years. The Securities and Exchange Commission made it a centerpiece of exams of private fund managers. A handful of cases came out in 2015-2016 on that first wave of private equity fund manager exams: Blackstone failed to fully inform investors … Read more »