Under rule 206(4)-2 of the Advisers Act, otherwise known as the Custody Rule, it is a fraudulent practice for a registered investment adviser to have custody of client funds or securities, unless the adviser takes certain...more
12/12/2019
/ Auditor Independence ,
Compliance ,
Custody Rule ,
Enforcement Actions ,
Financial Statements ,
Form ADV ,
GAAP ,
Investment Adviser ,
Investment Advisers Act of 1940 ,
PCAOB ,
Regulation S-X ,
Securities and Exchange Commission (SEC) ,
Willful Violations
In a series of enforcement cases over the past few months, the SEC has continued to bring actions focused on undisclosed fees charged to clients. Many of these cases have charged firms with fraud and other violations based on...more
11/12/2019
/ Affiliates ,
Anti-Fraud Provisions ,
Conflicts of Interest ,
Disgorgement ,
Enforcement Actions ,
Excessive Fees ,
Fee Disclosure ,
Fee-Sharing ,
Investment Adviser ,
Investment Advisers Act of 1940 ,
Securities and Exchange Commission (SEC)
A settlement last week involving a private equity fund sponsor is a reminder that compliance with fee calculation provisions and valuation policies and procedures are crucially important for fund managers. Even when an error...more
10/3/2019
/ Capital Contributions ,
Cease and Desist Orders ,
Enforcement Actions ,
Fund Sponsors ,
Investment Advisers Act of 1940 ,
Management Fees ,
Policies and Procedures ,
Private Equity ,
Sanctions ,
Securities and Exchange Commission (SEC) ,
Valuation
Recently, a group of Congress members introduced into Congress Senate Bill 2155 named the Stop Wall Street Looting Act of 2019. Although unlikely to be enacted into law as drafted, this proposed legislation would directly and...more
9/4/2019
/ Employee Retirement Income Security Act (ERISA) ,
Financial Institutions ,
Hedge Funds ,
Investment Advisers Act of 1940 ,
Investment Company Act of 1940 ,
Legislative Agendas ,
Leveraged Buyout ,
Portfolio Companies ,
Private Equity Funds ,
Private Investment Funds ,
Proposed Legislation ,
Public Disclosure ,
Securities and Exchange Commission (SEC)
The DC Circuit recently released an opinion addressing the SEC’s administrative findings against registered investment adviser The Robare Group (TRG) for failure to disclose alleged conflicts of interest. Although the court...more
While the SEC consistently announces that valuation is a “key area of focus,” it is uncommon for regulators to “second guess” valuation determinations in the absence of other potential violations. However, recent actions...more
The SEC announced a pair of settled orders on Tuesday extending additional provisions of the securities laws over ICOs and other digital assets – the agency’s first ever enforcement actions of their kind. As the SEC has been...more
9/17/2018
/ Broker-Dealer ,
Cryptocurrency ,
Digital Assets ,
Enforcement Actions ,
Initial Coin Offering (ICOs) ,
Investment Advisers Act of 1940 ,
Investment Company Act of 1940 ,
Investment Contract ,
Investors ,
Negligent Misrepresentation ,
Securities and Exchange Commission (SEC) ,
Securities Exchange Act ,
Token Sales
With the public equity markets at an all-time high and private equity fund raising setting new records, it might seem counter-intuitive to forecast litigation and regulatory risks. The opposite is true. Disputes typically...more
2/13/2018
/ Broker-Dealer ,
Commodity Exchange Act (CEA) ,
Cryptocurrency ,
CTFC ,
Cybersecurity ,
Enforcement Actions ,
Initial Coin Offering (ICOs) ,
Initial Public Offering (IPO) ,
Investment Adviser ,
Investment Advisers Act of 1940 ,
Litigation Fees & Costs ,
Popular ,
Private Equity Funds ,
Securities and Exchange Commission (SEC) ,
Unicorns
Valuation is typically near the top of the list when the SEC’s enforcement division and exam staff disclose their priority topics for private funds. We expect that trend to continue and, if anything, the focus on valuation...more