Doug Cornelius on compliance for private equity real estate
The Securities and Exchange Commission has been skeptical of registered investment advisers using advertisements. The default position is always that it’s likely to be fraudulent, deceptive or manipulative and therefore a violation of Section 206 of the Investment Advisers Act. The level of skepticism has been even higher for performance advertisements and even higher for performance … Read more »
In establishing a new investment vehicle, a sponsor needs to find a pool of interested investors. Given the varying rules around fundraising in different jurisdictions, the sponsor may chose to look for support in one place over another. The big problem is the time and cost it takes to get a proposed investment registered in … Read more »
There is too much money in a politics. I understand the Securities and Exchange Commission’s desire to purge political contributions from the investment adviser business for state and local government money. But I’ve never been a fan of Rule 206(4)-5, the pay-to-play rule. It’s continuing to ensnare companies in ways that highlight problems with the rule … Read more »
With BitCoin breaking through the $10,000 barrier and growing interest in the uses of the underlying blockchain technology, everyone is looking to cash in using virtual currency. As with an IPO, the goal of investors in an Initial Coin Offering is get in early and cheap before the market takes the price up. The Securities … Read more »
These are my notes from an ACA Compliance Webcast on this subject. I’m sure you can find a replay on the ACA website. There were three great presenters: Alicia Hyde, Partner, ACA Performance Services Mike Sonnenburg, CIPM, Managing Director, ACA Performance Services Kim Daly, Managing Director, ACA Compliance Group Definitions The first topic was what … Read more »
It looks like the Securities and Exchange Commission has been taking a close look at advertising by investment advisers. The Office of Compliance Inspections and Examinations issued a risk alert on The Most Frequent Advertising Rule Compliance Issues Identified in OCIE Examinations of Investment Advisers. I didn’t see any surprises in the alert. Advisers presented performance results without … Read more »
Many people seem to think that the new commissioner of the Securities and Exchange Commission, Jay Clayton, is likely to focus more on capital formation issues than the previous commissioner. The recent report on Access to Capital and Market Liquidity from the SEC’s Division of Economic and Risk Analysis caught my attention. From the signing … Read more »
The SEC opinion in KCD Financial Inc. (SEC Opinion 34-80340, March 29, 2017) affirms a fine and disciplinary action against KCD for selling securities in a private placement when no exemption from registration was available under Rule 506. The KCD opinion makes clear that you can’t fix the general solicitation failure by then only selling only … Read more »
The Securities and Exchange Commission has three mandates: (1) protect investors, (2) maintain fair, orderly, and efficient markets, and (3) facilitate capital formation. Regulation of private securities transaction through the accredited investor standard falls squarely in the conflict between these mandates. The general statement about why certain investors can invest in securities subject to less … Read more »
CCOs did not sleep well for one. Monitoring employee contributions to political candidates is difficult. The political contributions do not originate from the firm, so there is no accounting control that you can put in place. You can’t ban political contribution if you have an office in California. California labor law seems to make such a … Read more »