Doug Cornelius on compliance for private equity real estate
I haven’t published one of these in a while. Here are a bunch of compliance-related stories that recently caught my attention. In Silicon Valley, You Can Be Worth Billions and It’s Not Enoughby David Streitfeld in The New York Times Twenty one years later, Mr. Bechtolsheim may have seized a different kind of opportunity. He … Read more »
The Securities and Exchange Commission brought actions five investment advisory firms for violations of the Marketing Rule. The firms posted advertisements that included hypothetical performance on their websites. The SEC points out that websites are available to the general public and not “presenting hypothetical performance relevant to the likely financial situation and investment objectives of … Read more »
It survived motions to dismiss, summary judgment and now has survived a jury. The Securities and Exchange enlargement of insider trading, shadow trading, stuck through the case against Matthew Panuwat. The SEC alleged that Mr. Panuwat traded in the stock of Incyte Corporation based on highly confidential information. Incyte was in a similar business to … Read more »
Over the past 2.5 years the Securities and Exchange Commission has charged 60 investment advisory firms and broker-dealers with violations of the record-keeping requirements and collected penalties approaching $2 billion. Those were all broker-dealers, dual-registered investment advisers, or affiliated investment advisers. Broker-dealers have strict communications retention mandates. Investment adviser requirements are not as strict. Private … Read more »
Jordan Qsar, Austin Bernard, Chase Lambert and “Finance Person” all played baseball at Pepperdine University. After graduating, Finance Person ended up working at Jack in Box in the strategic finance group. Qsar went on to play for the minor league teams of the Tampa Bay Rays and other teams. Qsar played with Grant Witherspoon in the … Read more »
Pump and Dump schemes brought the fiduciary standard to light. In SEC v Capital Gains Research Bureau the US Supreme Court said a pump and dump scheme by an investment adviser violated its fiduciary duty. More recently, the SEC published an investor alert about Social Media and Investment Fraud. There is a lot of different … Read more »
As part of the Wells Report in 1972, the Securities and Exchange Commission adopted its no-admit/no-deny policy. The SEC, in agreeing to settle a case, relinquishes the opportunity to present the case in court. The defendant relinquishes the right to defend the case in court, in the press, and in the eyes of the public. … Read more »
Back in December, Chair Gensler gave a speech to an AI Summit and warned about companies overstating their use artificial intelligence tools. From there, you can see the SEC approaching the concerns as part of fundraising fraud and marketing fraud. Chair Gensler probably knew that the Securities and Exchange Commission was actively working on two … Read more »
The annual Securities and Exchange Commission request for funding from Congress is not generally very interesting. For fiscal year 2025 its seeking $2.6 billion to support over 5,000 full-time equivalents. Some of the stats are interesting. This one caught my eye: Looking at the private funds area, in the last five years, the number of … Read more »
Disclosure of conflicts is a cornerstone is a cornerstone of the regulation of investment adviser. 3D/L Capital Management clearly came up short. 3D/L entered into an arrangement with an ETF manager that would provide a revenue share to 3D/L they labeled an “onboarding fee.” The SEC complaint points out that the onboarding fee creates a … Read more »