Last week I wrote about FINRA’s 2014 exam priorities.  This week, the SEC announced its 2014 examination priorities covering a number of topics important to investment advisers, investment companies, broker-dealers, clearing agencies, exchanges and other self-regulatory organizations, hedge funds, private equity funds, and transfer agents.  While the SEC makes clear the list is not exhaustive, areas that firms will see heightened scrutiny include fraud … Read more

The SEC has just published additional guidance for those venture capital funds advisers relying on an exemption to not  register as investment advisers under the Investment Advisers Act of 1940, and who may worry that the way they  structured a fund (or whether certain actions discussed below) might jeopradize the ability to rely on the exemption.  In response to such inquiries, … Read more

PRIVATE FUND OFFERINGS: With General Solicitation Relaxation Comes New Scrutiny

  While under the JOBS Act the capital formation process in private offerings may have gotten easier, the regulatory scrutiny may have gotten harder. In a speech before the PLI Hedge Fund Management Conference in New York, Norm Champ, the SEC’s Director of the Division of Investment Management, addressed the increased oversight advisers to hedge funds relying on private offering … Read more

The SEC has issued a new Risk Alert stemming from its observations of  the  business continuity and disaster recovery planning practices of  a number of  investment advisers.  The alert follows an National Examination Program (“NEP”) review of the plans of approximately 40 investment advisers following  Hurricane Sandy.  The SEC says the goal is to encourage investment advisers to review their business continuity and disaster recorvery plans (“BCPs”) to … Read more

  The August 15 deadline for investment advisers to make Form 13F filings to report equity security securities holdings of their managed accounts is approaching.  Form 13F must be filed within 45 days of the end of a calendar quarter. As required by Section 13(f) of the Securities Exchange Act of 1934, and rule 13f-1, Institutional investment managers ( which … Read more

Deadline: Financial Statement Distribution for Funds of Hedge Funds

Advisers to funds of funds who maintain custody of clients funds as defined in Investment Advisers Act Rule 206(4)-2, and whose fiscal year ends December 31,  have a deadline looming.   The deadline is June 30 (180 days of the end of their fiscal year) for distributing to fund investors audited financial statement prepared in accordance with GAAP to fund investors  is approaching. … Read more

From Section 1088 of the Dodd-Frank Act comes final rules and guidelines from the SEC that would require entities covered by the rules to establish programs aimed at detecting, preventing, and mitigating identity theft.  Previously, Dodd-Frank required the SEC and the U.S. Commodity Futures Trading Commission (“CFTC”) to adopt joint rules requiring entities that are subject to these agencies’ respective … Read more

As part of its National Exam Program, the SEC’s Office of Compliance and Examinations (“OCIE”) has just mailed a letter to senior executives and Chief Compliance Officers of newly-registered investment advisers apprising them of what practices they can expect to be examined.   While the letter primarily concerns risk-based exams of advisers to private funds that registered with the SEC … Read more

Add a few recent SEC actions against hedge funds that include a hedge fund manager running a $37 million Ponzi scheme; a former director in a compensation scheme that netted hundreds of thousands of dollars in undisclosed income; co-founders of a Chicago-area investment firm misleading investors and supervisory failures resulting in penalties of more than $1 million; a private fund … Read more

A Resolution for Advisers and CCOs: The (New Year’s) Annual Review

It’s a New Year!  And for advisers it’s again time for a new year’s resolution, only this kind of resolution is not voluntary.  Like holidays, it comes once a year, and while the responsibility for it falls on the adviser, the obligation to ”administer” (or the commitment to follow our new year’s theme) falls on the Chief Compliance Officer - it’s called the Annual Compliance Review.  Further, consider it … Read more