Doug Cornelius on compliance for private equity real estate
Of the nine marketing cases released by the SEC recently, one caught me off-guard and has left me concerned. Say you’re a proud alumni of Notre Dame. You want to be associated with the athletic program and give some money back to the school. All you ask is that you get to be the official … Read more »
Can an investment adviser really say that they don’t have any conflicts of interest? You certainly can’t say that the firm “provides conflict-free advice” on the website when your Form ADV discloses conflicts of interest. The SEC released orders against nine investment advisers for violations of the Marketing Rule, claiming the firms made untrue claims, … Read more »
Reviewing the actions filed against other fund managers by the Securities and Exchange Commission helps me see what the SEC thinks are bad actions. When I started reading the case against Twenty Acre Capital I was hoping to gain some insight into the Marketing Rule. Twenty Acre is a registered investment adviser and advises a … Read more »
With the issuance of the Marketing Rule for Investment Advisers (Rule 206(4)-1) decades of interpretations and guidance were wiped out. We’ve been waiting to see what falls under those seven general prohibitions in the Marketing Rule. We’ve been thirsting for more guidance. We’ve gotten some additional clarification on the performance aspects of marketing. We know … Read more »
The Securities and Exchange Commission brought actions five investment advisory firms for violations of the Marketing Rule. The firms posted advertisements that included hypothetical performance on their websites. The SEC points out that websites are available to the general public and not “presenting hypothetical performance relevant to the likely financial situation and investment objectives of … Read more »
The Division of Examinations has been taking a close look at investment adviser marketing since the Marketing Rule rule compliance deadline last fall. We’re getting dribbles of updates as a result of those exams, with the SEC just starting to point out things it hasn’t liked in exams. The first was extracted performance from a … Read more »
When the Securities and Exchange Commission enacted the Investment Adviser Marketing Rule at the end of 2020, it threw out decades of cobbled together opinions, no action letters, and informal guidance. In the 18 months it took to reach the compliance date, the SEC offered little in the way of additional guidance. The SEC made … Read more »
“These charges mark the first violation of the SEC’s amended marketing rule” according to the SEC press release. Really, when use marketing collateral that your strategy has a 2700% return, you are going to catch the attention of the regulators. Titan Global Capital Management USA LLC, a New York-based FinTech investment adviser, used this hypothetical … Read more »
The Division of Examination released a risk alert on additional areas of emphasis during examinations focused on the new Marketing Rule (Rule 206(4)1): Examinations Focused on Additional Areas of the Adviser Marketing Rule. This is identified as a follow up to the September 19, 2022, Risk Alert describing the initial areas of review related to … Read more »
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 … Read more »