Doug Cornelius on compliance for private equity real estate
On August 7, 2025, President Trump issued an executive order titled “Democratizing Access to Alternative Assets for 401(k) Investors.” The order asks the relevant federal agencies to clarify the obligations of Employee Retirement Income Security Act plan fiduciaries when considering alternative assets as potential investment options for defined contribution plans. So private funds may end…
The definition of “accredited investor” is at the nexus of the Securities and Exchange Commission’s missions: (1) to protect investors, (2) to maintain fair, orderly, and efficient markets, and (3) to facilitate capital formation. If you’re an accredited investor you have access to private offerings. That enables capital formation. Private offerings are not subject to…
The Securities and Exchange Commission brought charges against three firms for failing to file Form D on time. Under Rule 503 of Regulation D, an issuer offering or selling securities in reliance on Rule 504 or 506 must file a notice of sales on Form D with the SEC no later than 15 calendar days…
The private fund industry is plagued with bad actors who don’t disclose fees and affiliate relationships. That has directly lead to the new reporting rule issued by the SEC for private fund advisers. The latest firm to get caught is the Prime Group, based in Saratoga Springs, New York. Prime’s business is investing in self-storage…
It’s been two months and the SEC finally issued a substantive FAQ on the Marketing Rule for investment advisers. https://www.sec.gov/investment/marketing-faq Gross and Net Performance Q. When an adviser displays the gross performance of one investment (e.g., a case study) or a group of investments from a private fund, must the adviser show the net performance…
The new Marketing Rule for Registered Investment Advisers takes effect today. (Nov 4) Hopefully you’ve got your policies and procedures in place and operational, if the rule applies to you. Many were hoping for some clarifications and updates. Only two questions were ever answered. There are several unanswered questions out there. I’ve seen two floating…
On December 22, 2020, the Securities and Exchange Commission adopted the new Marketing Rule (amended Rule 206(4)-1) under the Investment Advisers Act that will replace both the current advertising and cash solicitation rules and will govern investment adviser marketing. Since it’s a complete re-write of investment adviser marketing, most, if not all, of the staff…
Rule 506(b) of Regulation D provides a safe harbor for issuers to engage in private placements. Private placements undertaken pursuant to Rule 506(b) are limited by Rule 502(c) of Regulation D, which imposes as a condition on offers and sales under Rule 506(b)that “… neither the issuer nor any person acting on its behalf shall…
D.H. Hill Securities got hit with a FINRA penalty for violating the private placement offering rules. FINRA concluded that D.H. Hill did not have a pre-existing, substantive relationships with several investors in an offering. This was a breach of the Rule 502(c) The key point from the settlement was that the D.H. Hill began participating…
The Securities and Exchange Commission took a big step with private funds and setting a defined standard of Regulated Assets Under Management. There is still discretion in how different aspects are calculated. It works well for hedge funds and private equity funds. It starts breaking down as you have more alternative assets that fall outside…