These are some of the compliance related stories that recently caught my attention. SEC Charges Two J.P. Morgan Traders With Fraudulently Overvaluing Investments to Conceal Losses The SEC alleges that Javier Martin-Artajo and Julien Grout were required to mark the portfolio’s investments at fair value in accordance with U.S. generally accepted accounting principles and JPMorgan’s … Read more »
Action Against a Crowdfunding Platform
SoMoLend – which stands for Social Mobile Local Lending – is a crowdfunding platform that allows small businesses to borrow money from a network of lender. The State of Ohio claims that SoMoLend failed to meet the regulatory hurdles currently in place for crowdfunding. It’s also claiming that SoMoLend acting fraudulently when seeking its own … Read more »
Failing to Turn Real Estate Into a Security
Fee simple ownership of the “bricks and mortar” of real estate is not a security. “The offer of real estate as such, without any collateral arrangements with the seller or others, does not involve the offer of a security.” As you move further away from that model, you move closer and closer to the ownership … Read more »
Ignoring Changes to Regulation D
While many embraced lifting the ban on general solicitation and advertising, most despised the additional mess that the SEC added in. Fortunately, you can probably ignore much of that mess. At least for a few months. We knew that the SEC was going to require that firms selling public private-placements were going to have to … Read more »
Compliance and Breaking Bad
I was up last night hooked into latest episode of Breaking Bad. Besides it being a great show, it highlights a focus of compliance. How do you prevent your employees from going bad? For those of you who haven’t seen the show, Walter White, a mild-mannered high school chemistry teacher helps ends meet by making … Read more »
Compliance Bricks and Mortar for August 9
These are some of the compliance-related stories that recently caught my attention JOBS Act Update: Can the Genie go back in the Bottle? by Jay B. Gould in Investment Fund Law Blog But what happens if a fund manager is initially enamored of the new rules and decides to advertise generally, but later changes his … Read more »
Is Bitcoin a Security?
You may have noticed that I focus on SEC actions against real estate companies. At the core of that interest is a look at whether the Securities and Exchange Commission has jurisdiction. The SEC is limited to securities. Commodities get covered by the CFTC and real estate gets covered by ….. Bruce Carton pointed to … Read more »
Use of Data Collected from Form PF
Many private funds struggled with getting Form PF filed. Many in fund compliance were dubious that the Securities and Exchange Commission would be able to do anything meaningful with the massive amount of data pushed through the form. Regardless, Section 404 of Dodd-Frank required the SEC to gather the data so the Financial Stability Oversight … Read more »
Top Social Media Enforcement Issues in the Securities Industry
Broker-dealers and investment advisers are finding access to client through social networks and providing new marketing opportunities. But they also pose the challenge of making it harder for the firms to supervise, review, maintain, and protect the information. The Securities and Exchange Commission and FINRA are struggling to keep the regulatory requirements up to date … Read more »
Updated Guidance on the Custody Rule for Private Funds
The Securities and Exchange Commission has provided some updated guidance on the Custody Rule for private funds. It has sometimes been tricky for private funds to comply with Rule 206(4)-2. The custody rule deems it to be a fraudulent, deceptive or manipulative act, practice or course of business for an adviser to have custody of … Read more »