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Category Archives: hedge fund regulation

Hedge Fund BlackRock Reports That Insurers Are Moving Towards Private Assets

New research from hedge fund giant BlackRock shows that even in the wake of the CALpers exit from hedge funds, insurance firms are making a move toward private market assets to diversify against the risks that have traditionally underpinned their businesses. Conducted by the Economist Intelligence Unit, the BlackRock-commissioned study surveyed 243 senior executive insurers with over $6.2 trillion of […]

SEC Charges PE Firm with Misallocation of Expenses

Dear Friends, The SEC charged a private equity firm with breaching its fiduciary duty to its funds, by sharing expenses in a manner that improperly benefited one fund over the other, resulting in a $2.3 million settlement. The firm integrated two portfolio companies and managed them as one, owned by two funds. From 2005 – 2013, the firm allocated expenses […]

SEC Charges Former Hedge Fund Manager

Dear Friends, Yesterday, the SEC announced charges against a former hedge fund manager for taking excess management fees from clients and using the money to remodel his home and buy a Porsche. Additionally, the SEC fined the hedge fund manager’s firm $150,000, for failing to supervise the him, even though the firm expelled him and reimbursed the hedge fund, once […]

SEC Sanctions 19 Firms for Short Selling Violations

September 16, 2014 Dear Friends, The SEC charged 19 firms and one individual trader with short selling violations, resulting in a $9 million settlement. Rule 105 of Regulation M (Reg M) prohibits purchasing securities in follow-on and secondary offerings when the purchaser has effected short sales in the securities within a specified period, prior to the pricing of an offering […]

SEC Enforcement Initiative Focuses on Late Filers of Section 13 and 16 Filings

September 16, 2014 Dear Friends, The SEC charged 28 officers, directors, major shareholders, and 6 publicly traded companies, in connection with its enforcement initiative to “root out repeated late filers” of  ownership reports.  The individuals named in the SEC’s orders failed to promptly report information about their holdings and transactions in company stock. The SEC is focusing on two types […]

SEC Director’s Speech on Important Compliance Issues for RIAs

September 12, 2014 Dear Friends, Yesterday, Norm Champ, Director of the SEC’s Division of Investment Management, gave a speech highlighting important compliance, examination, and enforcement topics for registered investment advisers including:  Presence Exam Initiative: The SEC is nearing completion of its goal of examining 25% of newly registered investment advisers.  Alternative Mutual Funds:  Hedge funds must carefully consider the heightened […]

CFTC Issues JOBS Act Relief

September 10, 2014  Dear Friends, The CFTC issued an exemptive letter harmonizing its rules with the SEC’s JOBS Act amendments, lifting the ban on general solicitation for certain CPOs, in connection with private securities offerings.  Previously, the CFTC’s marketing restrictions on private offerings prevented CPOs from engaging in general solicitations. The relief granted by the CFTC is not self-executing – CPOs […]

SEC Announces $300,000 Whistleblower Award

Dear Friends, For the first time, the SEC announced a whistleblower award for an employee that performed an audit and compliance function. The whistleblower was awarded more than $300,000, for reporting wrongdoing to the SEC, after the company failed to take action when the employee first reported it internally. “Individuals who perform internal audit, compliance, and legal functions.. may be […]

SEC Examining Alternative Mutual Funds

August 12, 2014 Dear Friends, The SEC has begun its sweep exams of alternative mutual funds. As we mentioned in a previous alert, the SEC’s sweep will focus on a variety of areas including liquidity, leverage, and board oversight. Please click here for a speech by Norm Champ, Director of the SEC’s Division of Investment Management, outlining the areas of […]

SEC Prosecuting Via ALJ Hearings

August 5, 2014 Dear Friends, As reported by the Wall Street Journal, the SEC is increasingly prosecuting wrongdoers in hearings before administrative law judges, rather than jury trials, where the SEC has recently lost a number of cases. Please click here for the Wall Street Journal article written by Russell Ryan, a former assistant director of enforcement at the SEC. […]