Hedge Fund Blogs From HedgeCo.Net


FinCEN Proposes AML Rule for RIAs

Dear Friends, Yesterday FinCEN proposed a rule, enforceable by the SEC: Requiring certain registered investment advisers to establish anti-money laundering (AML) programs; and Including investment advisers within the general definition of a “financial institution” pursuant to the Bank Secrecy Act (BSA), subjecting them to BSA requirements, including compliance with: Filing Currency Transaction Reports and record keeping requirements relating to the transmittal […]

Hedge Funds Agree to $180 Million SEC Settlement

August 18, 2015 Dear Friends, The SEC announced that two asset managers agreed to pay $180 million to settle charges that they defrauded investors and failed to implement policies and procedures to prevent employees from making contradictory and false representations. According to the SEC, the hedge funds in question were highly leveraged, yet employees made misleading representations- assuring investors that […]

SEC Charges Firm with Operating Secret Trading Desk

August 12, 2015 Dear Friends, Today, the SEC announced that ITG Inc. (ITG) agreed to pay $20.3 million, to settle charges it operated a secret trading desk and misused confidential trading information of dark pool subscribers. ITG told the public it was an “agency-only” broker, but it operated an undisclosed proprietary trading desk, called “Project Omega,” which accessed live feeds […]

Judge Rules Against SEC

August 12, 2015 Dear Friends, U.S. District Judge Richard Berman ruled that the SEC’s method for appointing in-house administrative law judges, to preside over internal proceedings, is likely unconstitutional. Judge Berman agreed to temporarily halt an SEC action against a former Standard & Poor’s Ratings Services (S&P) executive. The SEC claims the executive aided, abetted, and caused S&P to change […]

SEC Charges 32 Defendants for Trading on Hacked News Releases

Dear Friends, Yesterday, the SEC charged 32 defendants in connection with a scheme to trade on hacked news releases. According to the SEC, the defendants hacked into newswire services to obtain non-public information about corporate earnings announcements – domestic and international defendants allegedly traded on the non-public information, generating more than $100 million in illegal profits. “Our use of innovative […]

SEC Commissioner Says Dodd-Frank has Backfired

Dear Friends, Yesterday, SEC Commissioner Daniel Gallagher said Dodd-Frank “has backfired, strangling our economy, increasing the fragility of the financial system, and politicizing our independent financial regulators.” Additionally, Commissioner Gallagher called on the Commission to be measured and thoughtful in exercising its enforcement authority, specific to CCO liability, stating: “Recent enforcement actions holding compliance officers to a standard of strict […]

Court Rules There’s No 180 Day Limit on SEC Investigations

July 31, 2015 Dear Friends, A Washington D.C. Court found in favor of the SEC, contrary to explicit Dodd-Frank language, that there is no 180 day limit on SEC investigations, to bring an enforcement action or terminate the investigation, following a Wells notice.  Dodd-Frank explicitly requires that the SEC “shall” file an action or notify the Division of Enforcement of […]

Solicitor General Asks Supreme Court to Review Newman Ruling

July 30, 2015 Dear Friends, Today, Donald Verrilli, the Solicitor General of the United States, filed a petition with the United States Supreme Court to review the Newman ruling. By way of background, in December 2014, The U.S. Court of Appeals for the Second Circuit overturned the insider trading convictions of two hedge fund managers – Todd Newman and Anthony Chiasson, redefining […]

Gupta Denied Newman Based Appeal

Dear Friends, On Thursday, Judge Jed Rakoff, who participated in CounselWorks’s SummerTime Summit 2015, rejected Rajat Gupta’s request to overturn his insider trading conviction, based on the Newman ruling. Rajat Gupta was convicted in 2012 of passing illegal tips to Raj Rajaratnam and was sentenced to two years in prison. Judge Rakoff held that Newman addresses the liability of tippees […]

SEC Guidance on Monitoring of Managed Accounts

Dear Friends, The SEC provided guidance for registered investment advisers (RIAs) regarding the mandatory reporting of personal securities transactions reports for “Access Persons,” as provided under Rule 204A-1 of the Advisers Act. Accounts over which an Access Person had no direct influence or control are excluded from the reporting requirement. The SEC outlined that certain blind trusts may be excluded from […]

SEC Commissioner on CCO Enforcement Actions

July 1, 2015 Dear Friends, On June 29, 2015, SEC Commissioner  Luis A. Aguilar, said that recent statements by fellow SEC Commissioner David Gallagher regarding enforcement actions against CCOs of investment advisers,  (Black Rock and SFX Financial) have “unnecessarily created an environment of unwarranted fear in the CCO community.” Commissioner Aguilar noted that CCOs that are competent, diligent, and act in […]

SEC Announces Compliance Date

June 26, 2015 Dear Friends, The SEC announced that the compliance date for the ban on third-party solicitation pursuant to the Pay-to-Play rule, will be July 31, 2015. The Pay-to-Play Rule prohibits an investment adviser from providing compensated services to a government entity, following a political contribution to certain officials of that entity. The third-party solicitation ban, prohibits an investment […]

SEC Proposes Form ADV Amendments

June 8, 2015 Dear Friends, The SEC has proposed amendments to Form ADV including, but not limited to, the following: Umbrella Registration: additional guidance on the ability to file a single form ADV for filing and relying advisers. Separately Managed Accounts (SMA): additional disclosure regarding SMAs; the scope and frequency of which will be dependent upon the adviser’s regulatory assets under management. Additional […]

CounselWorks and Compliance Science Webinar Invitation

   Speakers: Kathleen Malone, Managing Director of Northeast Division CounselWorks LLC Ms. Malone, a former SEC and FINRA examiner, assists investment advisers and broker-dealers with the development, implementation, and maintenance of their compliance programs.   Dave Nash Vice President, Customer Success Compliance Science Mr. Nash joined Compliance Science in 2007 where he engages with customers to successfully implement and support […]

BE-10 Filing Deadline Extended for New Filers

Dear Friends, The deadline to file Form BE-10, Benchmark Survey of U.S. Direct Investment Abroad, has been extended to June 30, 2015, for all new filers. U.S. persons (entities or individuals) with a direct or indirect ownership or control of more than 10% of voting stock of a non-U.S. business enterprise, during their 2014 fiscal year, are required to file Form […]




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