Doug Cornelius on compliance for private equity real estate
There are a few different ways to calculate Assets Under Management. The SEC has prescribed ways to calculate Regulatory Assets Under Management. Often AUM and RAUM will differ depending on an adviser’s business model and client base. But you can’t just make up RAUM. Rubin Cedric Williams did so at his firm Vista Financial Advisors. … Read more »
The Denver office of the Securities and Exchange Commission has rolled up a bunch more whistleblower rule violations. This follows up with last week’s settlement with Nationwide Planning for impeding clients from reporting violations to the SEC. In response to a Congressional mandate in Dodd-Frank, the Securities and Exchange Commission adopted Rule 21F-17 in August 2011, which … Read more »
The Securities and Exchange Commission continues its relentless assault on firms that have allowed employees to use text messages, WhatsApp, private email, or other “off-channel communications.” Last week, six rating agencies were caught in regulatory crosshairs. Moody’s, S&P, Fitch, HR Ratings, A.M. Best, and Demotech had to pay $49 million in fines to the SEC. The … Read more »
In response to a Congressional mandate in Dodd-Frank, the Securities and Exchange Commission adopted Rule 21F-17 in August 2011, which provides: (a) No person may take any action to impede an individual from communicating directly with the Commission staff about a possible securities law violation, including enforcing, or threatening to enforce, a confidentiality agreement . . . … Read more »
Investments advisers had been excluded the definition of “financial institution” under the Bank Secrecy Act. At least until today. The Financial Crimes Enforcement Network at Treasury issued a final regulation today that changes that exclusion. Most registered investment advisers are now included in the definition and will have to comply with the strict requirements of … Read more »
Just in time for a governor to be selected to the presidential ticket, the Securities and Exchange Commission levied a big fine for violating the Pay-to-Play Rule for Investment Advisers. Obra Capital Management was the sponsor and adviser to a closed-end, private fund. The Michigan Public Employees’ Retirement Fund made a $100 million commitment to … Read more »
The Securities and Exchange Commission and the Commodity Futures Trading Commission levied another $475 million in fines against broker-dealers, investment advisers and commodities firms. Ameriprise, Edward D. Jones, LPL and Raymond James each paid a $50 million fine. Millions in fines because firm employees were texting with clients and business partners. The order against P. … Read more »
The Bank Secrecy Act requires broker-dealers to file suspicious activity reports. Under the SAR Rule (31 C.F.R. § 1023.320(a)(2)), every broker-dealer has to file a report for a transaction of at $5000 that That’s all a bit vague. So FINRA has produced a list of more actionable items, most recently compiled in FINRA Regulatory Notice … Read more »
The Marketing Rule, Advisers Act Rule 206(4)-1, Section (e)(1) defines hypothetical performance as “performance results that were not actually achieved by any portfolio of the investment adviser and includes, but is not limited to: It’s okay to use hypothetical performance in your marketing materials, IF (that’s a big if) the adviser adopts and implements policies … Read more »
If you’re going to commit financial fraud, you need to figure out a way not only to deceive your “investors” but also the gatekeepers involved in the process. Your auditor is going to ask questions and not issue financial statements if there is fraud. Your prime broker and custodian are going to ask questions. Hedonova … Read more »