SEC Sees Deficiencies in “Custody Rule”: Warns Clients to be Vigilant.

Simon RivelesCustody Rule, Investment Advisers, SEC

The Securities and Exchange Commission (the “Commission”) recently issued an Investor Bulletin with guidelines on compliance with its “custody rule” for investment advisers. While the rule is designed to enhance safeguards over client assets, clients still need to be aware of the specific steps taken by their advisers to comply with the rule. Custody relates to the holding of client funds or securities, directly or …

Private Equity Funds Compliance Lapses Lead to SEC Sanctions

Simon RivelesCompliance, Private Equity Fund, SEC

By Ryan Finn and Simon Riveles On March 11th, the SEC announced two decisions involving private equity firms that demonstrate its commitment to emphasizing the important role of compliance in preventing and detecting possible violations of the securities laws.  Although these cases dealt specifically with the activities of private equity firms, the issues raised by the SEC’s decisions were broad enough to be relevant and …

FINRA Outlines 2013 Regulatory Priorities

Simon RivelesCyber-security, FINRA, FINRA Rule 5123, Hedge Funds, Private Placement, Uncategorized

In keeping with its prior year practice, on January 11, 2013, FINRA (the “Agnecy”) issued a Examination Priorities Letter to member firms highlighting the areas of the industry it intends to focus particular attention and resources. These areas include market regulation, business conduct, insider trading, financial and operational concerns. Market Regulation As computer based trading continues to capture an increasingly large segment of the market, …

SEC Names Acting Enforcement Director

Simon RivelesSEC

On January 31, the SEC announced that George Canellos will serve as Acting Director for the Division of Enforcement. Mr. Canellos currently is the Deputy Director of that division, and effective February 8, 2013, will fill the director role vacated by the departing Robert Khuzami. Mr. Canellos was appointed Deputy Director in June 2012 and, according to the release, has been instrumental in developing the …

The JOBS Act: Important Questions Remain Unresolved For Private Funds

Simon RivelesCFTC, General Solicitation, Hedge Funds, Jobs Act

On August 29, 2012, the SEC proposed rules implementing the Jumpstart Our Business Startups Act’s (JOBS) eliminating the long-standing ban on general solicitation and general advertising for certain exempt securities offerings. The proposal would require (1) all purchasers of securities sold in such offerings to be accredited investors and (2) that issuers take reasonable steps to verify that their purchasers are accredited investors. The proposed …