Latest Articles

On Sept. 12, 2018, the U.S. Securities and Exchange Commission charged the principal of a hedge fund manager and the hedge fund manager itself with illegally profiting from a scheme to drive down the price of Ligand Pharmaceuticals Inc., generating approximately $1.3 million in illegal profits. The SEC’s complaint charges that Gregory Lemelson and Massachusetts-based Lemelson Capital Management LLC issued false information about Ligand after Lemelson took a short position in Ligand on behalf of…
On July 11, 2018, the Securities and Exchange Commission’s Office of Compliance Inspections and Examinations (“OCIE”) issued a Risk Alert focusing on the most common deficiencies relating to best execution found by the SEC staff in recent examinations of investment advisers. The Risk Alert provides a snapshot of OCIE’s expectations regarding a fund manager’s best execution policies and procedures. Click here to read more about how OCIE’s recent Risk Alert will affect private fund managers.…
In an interview with Private Funds Management, partners Marc Elovitz and Joseph Smith discuss regulator views on conflicts of interest and how to best deal with these issues as the fund formation climate becomes more complex. Marc and Joe also share their insights on how conflicts of interests are viewed by the SEC within the private equity space and how they are best dealt with in the industry. Click here to read the interview.…
On Aug. 25, 2016, the U.S. Securities and Exchange Commission adopted a final rule that amends Form ADV — the filing that investment advisers registered with the SEC use to apply for and maintain their registration and that exempt reporting advisers utilize to claim and maintain their registration exemption. The SEC also amended its books and records rule to require more documentation with respect to performance reporting records. While these amendments will go into technical…
As we move deeper into another election season, investment advisers should consider refreshing their efforts to comply effectively with the Securities and Exchange Commission’s rule on their political contributions — known as the pay-to-play rule. Although it’s more than five years old, Rule 206(4)-5 has not been easily integrated into many advisers’ compliance programs. If your firm allows its covered persons to make political contributions, there is not one simple step to avoid triggering Rule…
The Enforcement Division of the U.S. Securities and Exchange Commission (“SEC”) continued its “Rule 105 initiative” this year, culminating in settlements with six firms that total more than $2.5 million in monetary sanctions, in addition to other sanctions. These cases highlight important components of the SEC’s approach to Rule 105 enforcement. Fund managers should review their policies with regard to Rule 105, stress test the actual procedures that support those policies, and redouble their surveillance…
Financial regulators are emphasizing the risk poor cybersecurity poses to market integrity and financial stability, and elaborating on policies and controls they expect the firms they oversee to have in place. Investment managers’ responsibility for cybersecurity has grown like compound returns. The SEC’s Office of Compliance Inspections and Examinations disclosed that its examination staff would be testing investment advisers to assess cybersecurity procedures and controls, and the National Futures Association proposed an interpretive notice expressly…
As the end of 2015 approaches, financial regulators continue to emphasize the risk that poor cybersecurity poses to market integrity and financial stability, and to elaborate on the policies, procedures and controls they expect investment advisers, commodity pool operators and registered investment companies to have in place. Click here to read more.…
On Aug. 25, 2015, the Financial Crimes Enforcement Network (“FinCEN”) issued for public comment a proposed rule (the “Proposed Rule”) requiring investment advisers registered with the SEC (“RIAs”) to establish anti-money laundering (“AML”) programs and report suspicious activity to FinCEN pursuant to the Bank Secrecy Act (“BSA”). The long-anticipated Proposed Rule arrives nearly seven years after FinCEN withdrew earlier proposed AML rules, published in 2002 and 2003, directed at investment advisers, unregistered investment companies and…
SRZ on Aug. 11, 2015 submitted comments to the U.S. Securities and Exchange Commission on the agency’s proposed amendments to Form ADV and the corresponding rules under the Investment Advisers Act. SRZ’s comment letter addresses confidentiality concerns about the proposal’s obligation for advisers to make detailed disclosure of proprietary information regarding separately managed accounts. The firm also makes suggestions regarding the SEC’s proposal to incorporate “umbrella registration” into Form ADV, particularly for foreign advisers. SRZ’s comment…