In it’s prohibition against fraud, deceit and manipulation, Section 206 of the Investment Advisers Act is strict. There is no requirement of intent. You can argue that you didn’t mean to mean to commit fraud. That may affect whether you get referred to enforcement instead of merely getting hit with a deficiency letter or an … Read more »
Is it an Advertisement?
Section 206 of the Investment Advisers Act prohibits fraud, deception or manipulation, regardless of whether the fund manager is registered. Once registered, Rule 206(4)-1 imposes additional restrictions on advertising that the SEC has determined would be fraudulent deceptive or manipulative. So what is an advertisement for purposes of the rule 206(4)-1: “[A]ny notice, circular, letter … Read more »
Marketing Limitations on Private Funds
As a private fund manager registering as an investment adviser, you get new limitations on how you market and sell interests in your funds. It all starts with Section 206 of the Investment Advisers Act: It shall be unlawful for any investment adviser, by use of the mails or any means or instrumentality of interstate … Read more »
Possible Extension to Registration for Private Fund Managers
Dodd-Frank put enormous pressure on the Securities and Exchange Commission to create dozens of new rules. Tile IV of the law, the Private Fund Investment Advisers Registration Act of 2010, shifts thousands of mid-sized investment advisers from federal to state registration. It also repeals the private adviser exemption, causing most private fund managers to register … Read more »
Compliance Bits and Pieces – UK Bribery Act Edition
With the recent release of the Guidance under the UK Bribery Act, I decided to pull together some other stories: Howard Sklar decided to start from the back of the guidance and give his thoughts on the case studies: Case Study #1: Facilitation Payments< Case Study #2 Case Study #3: Junior Varsity…I Mean, JVs Case Study #4: Hospitality Case … Read more »
Report on SEC Referrals to Enforcement
For a registered investment adviser, it’s okay to have the SEC’s Office of Compliance Inspections and Examinations visit you. It’s a big problem if the enforcement division visit. OCIE will issue a deficiency letter asking you to fix any deficiencies it finds. If your noncompliance is serious or the examiners think investor funds are at … Read more »
The SEC’s Asset Management Unit
Yesterday, Bruce Carton of Securities Docket hosted a webinar: The SEC’s Asset Management Unit and Strategies for Avoiding Trouble in 2011 and Beyond. He managed to get Bruce Karpati, the co-head of the SEC’s Asset Management unit, to participate. Also joining the presentation were John Reed Stark, Managing Director of Stroz Friedberg and former Chief, … Read more »
Pay for Performance from Future Fund Flows
Michael Weisbach Professor and Ralph W. Kurtz Chair in Finance at The Ohio State University, and his colleagues, Ji-Woong Chung, Berk A. Sensoy and Léa H. Stern, are looking a the effect of the pay for performance at private equity funds. One hand, there is the current income from management fees and a percentage of … Read more »
SEC Answers Questions About the Pay to Play Rule
The staff of the Division of Investment Management at the Securities and Exchange Commission has prepared responses to some questions about Rule 206(4)-5 under the Investment Advisers Act of 1940. Here are a few that caught my eye: Question II.6. Covered Associates’ Family Members. Q: Are contributions by an advisory employee’s family members covered under … Read more »
Compliance Bits and Pieces for April 1
Here are some compliance related stories that caught my eye: Playmobil Apple Store Playset from ThinkGeek So when we spotted this amazing Apple Store Playset from PLAYMOBIL™ we were admittedly in a bit of a conundrum. On the one hand, it’s a product designed for children much younger than ourselves. On the other hand, it’s … Read more »