Doug Cornelius on compliance for private equity real estate
The concept behind the custody rule is simple. The adviser needs to hold client assets safely and needs a third -party to verify that the adviser is actually holding the assets. But as it’s been put in place, the Custody Rule is complicated. At times the SEC has needed to provide guidance, and then provide … Read more »
The sculpture, titled “The Fearless Girl,” was made by Kristen Visbal and photographed by Federica Valabrega. State Street Global Advisors conspired in the middle of the night to drop a statue in Bowling Green Park of a girl facing off against the famous Wall Street Charging Bull. It’s part of a campaign by SSGA to … Read more »
I did not find the headline to be remarkable: SEC Charges Mexico-Based Homebuilder in $3.3 Billion Accounting Fraud. The subtitle caught my attention: SEC Uses Satellite Imagery to Crack Case We learned from the Rajaratnam insider trading case that the SEC was using wire taps and informants as part of its securities fraud investigations. The SEC … Read more »
These are some of the compliance-related stories that recently caught my attention. Detecting Managed Earnings With CEO Profiles by Tri Nguyen, Chau Duong and Sunitha Narendran in the CLS Blue Sky Blog We offer the PSCORE, a composite grouping of individual characteristics linked with a higher likelihood of earnings management by prior research. We identified … Read more »
It was a real estate fraud action that caught my eye, but the victims that kept me reading. The Securities and Exchange Commission filed charges against Paul Garcia and his fund management company, Caliber Capital, for defrauding investors. Since it was a real estate fraud, it caught my eye. But I didn’t have to dive … Read more »
The Securities and Exchange Commission has three mandates: (1) protect investors, (2) maintain fair, orderly, and efficient markets, and (3) facilitate capital formation. Regulation of private securities transaction through the accredited investor standard falls squarely in the conflict between these mandates. The general statement about why certain investors can invest in securities subject to less … Read more »
PwC had a public failure last night, in the worst possible way, during the Oscars telecast. After running nearly 45 minutes over schedule, the final remaining award was for best picture. Warren Beatty and Faye Dunaway were on stage with a red envelope. The duo was presenting the best picture award in celebration of the 50th … Read more »
Debt instruments can be securities. Section 3(a)(10) of the Securities Exchange Act of 1934 explicitly includes “notes” in the definition of a security, but does not include loans. Federal law uses some variation of the factors stated in S.E.C. v. Howey Co., 328 U.S. 293 (1946) n analyzing whether an instrument is an “investment contract” … Read more »
John Glenn passed away at the end of 2016. He was a Senator, an astronaut, and distinguished pilot in the World War II and the Korean War. The picture below struck me as one of ultimate cool. Mr. Glenn had just finished orbiting the Earth on February 20, 1962. Doing so in a tin can … Read more »
The 2009 arrest of Raj Rajaratnam of the Galleon Group was the start of a long trail of insider trading prosecutions that culminated in the prosecution of SAC Capital. The SEC had identified Steve Cohen as the worst of the insider trading hedge funds and the SEC put his SAC Capital in its cross-hairs. It convinced the … Read more »