Doug Cornelius on compliance for private equity real estate
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 »
“When the SEC seeks civil penalties against a defendant for securities fraud, the Seventh Amendment entitles the defendant to a jury trial.” SEC v. Jarkesy The case presented three issues: (1) Whether statutory provisions that empower the Securities and Exchange Commission to initiate and adjudicate administrative enforcement proceedings seeking civil penalties violate the Seventh Amendment. … Read more »
This is a new term to me. Quishing: a business email compromise (BEC) attack that uses QR codes in embedded PDF documents to redirect victims to phishing URLs. There is a Phishing-as-a-Service (PhaaS) platform called ONNX Store, which apparently has a user-friendly interface to enable the orchestration of phishing attacks. Good to know there are services making it easy to … Read more »
Reviewing the actions filed against other fund managers by the Securities and Exchange Commission helps me see what the SEC thinks are bad actions. When I started reading the case against Twenty Acre Capital I was hoping to gain some insight into the Marketing Rule. Twenty Acre is a registered investment adviser and advises a … Read more »
We consider a challenge to the Final Rule by petitioners National Association of Private Fund Managers, Alternative Investment Management Association, Ltd., American Investment Council, Loan Syndications and Trading Association, Managed Funds Association, and the National Venture Capital Association collectively “Private Fund Managers”). For the following reasons, we VACATE the Final Rule. The central focus is … Read more »
“The Securities and Exchange Commission today announced that it will close its Salt Lake Regional Office (SLRO) later this year, reducing its regional footprint from 11 regional offices to 10.” The SEC’s Salt Lake City office has always stood out for covering such a small area. According to the press release, it has been the … Read more »