One cliche thrown around is that tipping a golf buddy to material non-public information is an insider trading violation. The Securities and Exchange Commission just filed a case that proved that cliche true. Eric McPhail learned the expected earnings and major pending corporate developments at American Superconductor through a friend who is (was?) an executive … Read more »
Weekend Reading: A Time to Attack
What should we do about the nuclear weapon program in Iran? The country is not complying with the Treaty on the Non-Proliferation of Nuclear Weapons. Iran has four main sites being used to create weapons-grade uranium. The country has stopped short of further purifying the uranium to the concentration needed for a bomb. But once … Read more »
Compliance Bricks and Mortar for July 11
These are some of the compliance-related stories that recently caught my attention. Firms Withdraw as MAs Ahead of Final Rule by Kyle Glazer in The Bond Buyer Nathan Howard, an attorney who works with municipal advisors, said the many withdrawals are the result of guidance that has made it more clear who is likely to … Read more »
Narrowing the Safe Harbors
The Securities and Exchange Commission rolled out the accredited investor verification requirement and made it principle-based for purposes of Rule 506(c). You have to take reasonable steps to verify that an investor meets the accredited investor standard. In the same release it created four non-exclusive safe harbors that would deemed to be taking “reasonable steps.” The … Read more »
Compliance and the Tour de France
For me, July starts with the red, white and blue, then quickly turns to yellow. The yellow jersey worn by the overall leader of the Tour de France. I’ve been a big fan of the Tour de France for the past decade and a half. I admit that it was the success of Lance Armstrong … Read more »
Group Purchasing Programs and Compliance
Can a fund manager save the investors money, but still be doing the wrong thing? That’s the issue presented by the Securities and Exchange Commission’s look at group purchasing programs for private equity firms. Buying in bulk usually results in cost savings. A private equity firm, with a collection of companies in its portfolios, should … Read more »
NRS 29th Annual Compliance Conference
I’m trying out a new compliance conference this fall: the NRS 29th Annual Fall Investment Adviser & Broker-Dealer Compliance Conference. I have to admit that I’m attending mostly because they asked me to speak. My session is on Issues on Private Fund Management on Day Two. One of the challenges of staying up-to-date on compliance … Read more »
Life, Liberty and the Pursuit of Happiness
IN CONGRESS, July 4, 1776. The unanimous Declaration of the thirteen united States of America, When in the Course of human events, it becomes necessary for one people to dissolve the political bands which have connected them with another, and to assume among the powers of the earth, the separate and equal station to which … Read more »
Guidance on Accredited Investor Verification
The Securities and Exchange Commission revised the private placement rules last year to permit public private-placements. Of course it took some prodding from Congress in the JOBS Act to get that change. The law and the new regulation require the issuer to take “reasonable steps” to determine that the investor is an “accredited investor.” The … Read more »
New Guidance on the Custody Rule for SPVs and Escrows
The Securities and Exchange Commission’s Division of Investment Management recently released updated guidance on the Custody Rule. Private funds, especially private equity funds, have been wrestling with the SEC’s Custody Rule. The rule clearly comes from the perspective of regulating retail investment advisers and hedge funds. It fails to deali n a useful manner with … Read more »