Joseph A. Meyer, Jr., and his Statim Holdings, Inc. offered investors in its Arjun private fund that investors would not lose money. The catch is that you can’t redeem from the fund for ten years or you forfeit 1/2 of your capital. Of course the real catch is that Meyer a fraud. (At least according … Read more »
SEC’s 2019 Exam Priorities
Perhaps the Securities and Exchange Commission saw the government shutdown coming when it published its 2019 exam priorities on December 20. Compliance and Risks in Critical Market Infrastructure – Examiners will focus on entities that provide services critical to the proper functioning of capital markets, including clearing agencies, national securities exchanges, and transfer agents FINRA … Read more »
Real Estate Cash Cow
With the Securities and Exchange Commission back up and running, we are seeing new enforcement actions coming out. A real estate fraud caught my attention. The SEC charged Phillip Michael Carter, Bobby Eugene Guess and Richard Tilford with raising almost $45 million from over 270 investors by selling short-term, high-yield promissory notes issued by shell … Read more »
Compliance Bricks and Mortar
These are a few of the compliance related stories that recently caught my attention. Why The SEC Shutdown Must End (Now) by John Reed Stark It is not surprising that the SEC has only filed one civil action in federal court since the shutdown began, which was a parallel action brought alongside the U.S. Attorney’s Office for … Read more »
Compliance Bricks and Mortar for January 19
These are some compliance-related stories that recently caught my attention: SEC Brings Enforcement Action for Failure to Verify Accredited Investor Status by Steve Quinlivan The SEC alleged CoinAlpha did not have pre-existing substantive relationships with nine of the fund’s investors and engaged in a general solicitation of public interest in the securities offering through CoinAlpha’s website, which … Read more »
Compliance Bricks and Mortar for November 30
These are some of the compliance-related stories that recently caught my attention. The Shift from Active to Passive Investing: Potential Risks to Financial Stability? by Patrick McCabe, Board of Governors of the Federal Reserve System In our working paper, we examine four channels by which the active-to-passive shift may affect financial stability: (1) effects on liquidity … Read more »
A Court Rules that an ICO was not a Securities Offering
Last month, I wrote about the complaint filed by Securities and Exchange Commission against Reginald Ringgold and his Blockvest initial coin offering. One of the Blockvest’s marketing ploys was to note its membership in the Blockchain Exchange Commission. The SEC managed to obtain an emergency court order to halt a planned initial coin offering of … Read more »
Do Private Equity Funds Manipulate Reported Returns?
Some do, and it backfires. In a working paper by Gregory W. Brown, Oleg R. Gredil, and Steven N. Kaplan they studied cash flows and NAV reports for a sample of 2,071 buyout and venture funds. The study was motivated by the potential incentive for fund managers to exaggerate performance to attract investors to a … Read more »
The Pre-Holiday Regulatory Axe
While I was preparing for Thanksgiving on Wednesday, the Securities and Exchange Commission put 43 of its rules on the chopping block. As you know, it’s not so simple to just eliminate a rule. Eliminating a rule is itself a rulemaking, requiring notice and comment periods. Of course, the SEC would also need to justify … Read more »
Happy Thanksgiving
Thank you for taking the time to read Compliance Building. I’m grateful to meet, chat and correspond with so many of you in the compliance community. I hope you get to enjoy a long weekend to reflect and spend time, with friends, family, neighbors and loved-ones. Read more »