A recent SEC enforcement action caught my attention because it involved defrauding a landlord and miscounting residents. That left me scratching my head over why the Securities and Exchange Commission was involved with a senior living residence. The SEC Enforcement Division alleges that then-CEO Laurie Bebo and then-CFO John Buono made false disclosures and manipulated … Read more »
Compliance Bricks and Mortar for December 5
These are some of the compliance-related stories that recently caught my attention. Sherlock Holmes and Innovation in the Compliance Function, Part I – A Study In Scarlet by Tom Fox in the FCPA Compliance and Ethics Blog First I am back with an homage to Sherlock Holmes, for it was in the magazine Beeton’s Christmas … Read more »
Failure to Register with the SEC as an Investment Adviser
One of the questions that come up with private funds and Dodd-Frank was what would happen if you failed to register with the SEC? HSBC Holdings Plc found out for us. HSBC will pay $12.5 million to settle claims that its Swiss private-banking unit solicited U.S. investors without being registered. The Securities and Exchange Commission … Read more »
Stealing From Investors Through Fraudulent Expenses
The Securities and Exchange Commission charged a hedge fund manager, his investment advisory firm, and an employee with stealing from investors in two hedge funds. The theft was carried out by charging more than $1 million for fraudulent research expenses and fees. According to the SEC complaint, Steven R. Markusen, the owner of Archer Advisors … Read more »
Happy Thanksgiving
Washington, D.C. October 3, 1863 By the President of the United States of America. A Proclamation. The year that is drawing towards its close, has been filled with the blessings of fruitful fields and healthful skies. To these bounties, which are so constantly enjoyed that we are prone to forget the source from which they … Read more »
SEC Issues Second Exemptive Relief from Pay-to-Play
It’s been about a year since the Securities and Exchange Commission granted its first exemptive order Rule 206(4)-5 when an adviser accidentally violated the pay-to-play rule. The SEC has now issued its second relief order. Ares Real Estate Management Holdings filed for exemptive relief after a senior partner wrote a $1,100 check to Colorado Governor … Read more »
Weekend Reading: War of the Whales
Dozens of beaked whales beach themselves in the Bahamas. This leads to a legal battle against the U.S. Navy. Joshua Horwitz details the story, scientists, the legal battle, and the science in War of the Whales. It’s an uphill battle when the other side is the most powerful fighting machine on the seas. It’s an … Read more »
Compliance Bricks and Mortar for November 21
Commissioner: ‘Millionaires can fend for themselves’ by Mark Schoeff Jr. in Investment News “This obsession with ‘protecting’ millionaires — potentially at the cost of hindering the wildly successful and critically important private markets — strains logic and reason,” said SEC member Daniel Gallagher Jr. “Millionaires can fend for themselves.” S.E.C.’s Delay on Crowdfunding May Just … Read more »
Anti-Money Laundering Regulations are Coming for Private Funds
Investment advisers and private funds have largely not been under the strict regulatory requirements under Bank Secrecy Act. The rationale is that the custody requirements impose a custody account and the custodian is subject to those rules. It looks like things are going to change. U.S. Treasury Undersecretary for Terrorism and Financial Intelligence David Cohen … Read more »
Pay to Pour
Massachusetts regulators have launched an investigation into whether providers are paying for access. In this case, it’s about beer, not political donations. Pay-to-play is illegal under Massachusetts and federal liquor control laws. The restrictions date back to the end of Prohibition, to keep large breweries from dominating the market. Small breweries have to compete for … Read more »