Doug Cornelius on compliance for private equity real estate
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 »
On March 1, the US District Court in Northern Alabama ruled that the “Corporate Transparency Act is unconstitutional because it exceeds the Constitution’s limits on Congress’ power.” It’s not clear what effect this ruling is going to have on other parties and other jurisdictions. Congress passed the 2021 National Defense Authorization Act which included a … Read more »
SEC IA Rule 204A-1 requires all of an investment adviser’s access persons to report, and compliance to review, their personal securities transactions and holdings periodically. Section (3)(I) has an exception for (3) Exceptions from reporting requirements. Your code of ethics need not require an access person to submit:(i) Any report with respect to securities held in … Read more »
Once every four years we get a February 29. 2024 is one of those years. The big compliance impact is for annual and quarterly reporting. If the standard is 90 days after year-end, that is March 30 and not the usual March 31. That is especially relevant for Form ADV. Make sure to get it … Read more »
We’ve seen many insider trading cases involving friends, spouses, domestic partners, and dates. We can guess what the end result would be. I think the Tyler Loudon case is the first one that has taken us all the way to the end. Tyler and Mrs. Loudon lived in Houston. Mrs. Loudon worked as a mergers … Read more »
If you can grab the trading symbol “BUZZ” you should be able to make some money with it. Right? A company that owns beehives? or sells honey? or sells honey products? Or social buzz? VanEck Associates wanted to ride the social media wave and created an ETF that would “Track the performance of the 75 … Read more »
We’ve been here before. FinCEN proposed anti-money laundering rules for investment advisers in 2003 and 2015. The pushback has been the Custody Rule, which requires a third-party to hold the client assets. That third-party will be doing the AML-KYC review. Those that are doing self-custody fall under existing AML rules. Since 2015, there has been … Read more »
The Securities and Exchange Commission issued a Staff Review of the “Accredited Investor” Definition at the end of 2023. The Dodd-Frank Wall Street Reform and Consumer Protection Act directs the SEC to review the accredited investor definition every four years. The Staff previously reviewed the definition in 2015 and in 2019 (as part of the Concept Release on Harmonization of … Read more »
The press release for changes to “qualifying venture capital fund” caught my attention. I didn’t recall that definition, so I took a closer look. It’s in Section 3(c)(1) of the Investment Company Act, which makes it part of the “private fund” definition. Section 504 of the Economic Growth, Regulatory Relief, and Consumer Protection Act of … Read more »
The Division of Examinations has been taking a close look at investment adviser marketing since the Marketing Rule rule compliance deadline last fall. We’re getting dribbles of updates as a result of those exams, with the SEC just starting to point out things it hasn’t liked in exams. The first was extracted performance from a … Read more »