Compliance Solutions for Investment Advisers

Monthly Archives: July 2013

A Culture of Compliance

Some really telling quotes by Harvey Pitt, the former SEC Chairman, from a NY Times article about compliance (in reference to SAC Capital Advisors and their (lack of a) culture of compliance): “When it comes to compliance, you have to live, eat, breathe and drink it.” In talking about SAC’s compliance program: “My sense was

Massachusetts to Fight Reg. D Fraud

Stating that the Securities and Exchange Commission’s newly allowed hedge fund and private equity ad rule “sets in motion a much easier path for shady operators and outright crooks,” Massachusetts Securities regulator William Galvin announced Monday that he’s setting up a new unit to monitor crowdfunding activity in the state. The new unit, to be manned by

Failing to Supervise Results in Liability

The Securities and Exchange Commission today announced charges against hedge fund adviser Steven A. Cohen for failing to supervise two senior employees and prevent them from insider trading under his watch. The SEC’s Division of Enforcement alleges that Cohen received highly suspicious information that should have caused any reasonable hedge fund manager to investigate the

Insider Trading Can get Expensive

The SEC obtained a $13.9 million penalty against former Goldman Sachs board member Rajat K. Gupta for illegally tipping corporate secrets to former hedge fund manager Raj Rajaratnam.  Gupta also is permanently barred from serving as an officer or director of a public company.The SEC previously obtained a record $92.8 million penalty against Rajaratnam for prior insider

No Surprise Exams for Most SEC Advisers

Most of the investment advisers registered with the SEC who maintain custody of their clients’ investment funds aren’t subject to surprise annual examinations, according to a new federal report. A study released last Monday by the Government Accountability Office found that, as of April 1, 4,446 of the 9,982 SEC-registered advisers had control over client money,

Did You Know . . .

. . . that an SEC Enforcement action is more likely to result from a sweep examination than from a routine examination? That is because sweep exams are usually spurred when a particular business practice of concern has come to the attention of the SEC.

IRS Delays FATCA for 6 Months

The IRS announced that the implementation of the Foreign Account Tax Compliance Act (FATCA) generally will be delayed for six months and the FATCA registration portal will open on August 19, 2013.

SEC Forecasts an Increase in Whistleblower Cases

The SEC recently announced the second-ever Dodd-Frank whistleblower award. Based on data released by the SEC after the first full year of the new Dodd-Frank whistleblower program, as well as  recent remarks by an SEC official, an increasing number of awards are expected over the next 6 to 12 months. Given this trend, companies should be

SEC Lifts General Solicitation Ban on Hedge Funds

Last August, in order to comply with the Congressional mandate to implement Section 201(a)(1) of the JOBS Act, the SEC proposed a rule that would remove the general solicitation ban for certain 506 offerings in which sales of securities would be limited to accredited investors and issuers would be required to take reasonable steps to

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