On March 15, 2019, the U.S. Securities and Exchange Commission charged a private fund manager and its former chief operating officer with manipulating the price of an asset sold by one client to another. The SEC’s orders charge Talimco LLC
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NFA Update: New Supervision and Cybersecurity Obligations for Private Fund Managers Registered with the National Futures Association
The National Futures Association issued two Interpretive Notices that will affect all private fund managers that are NFA members (i.e., managers with funds or accounts that trade commodity interests and that are not eligible for an exemption from registration with…
CFPB Proposes Revisions to Its Policy on No-Action Letters and Creation of New Product Sandbox to Spur Fintech Innovation
The Consumer Financial Protection Bureau (“CFPB”) recently issued a proposal consisting of (i) revisions to its Policy on No-Action Letters — which was finalized in February 2016 (“2016 Policy”) — designed to increase interest in applying for no-action letters (“NALs”) under…
CFTC Proposes Broader Relief for Commodity Pool Operators
On Oct. 9, 2018, in a wide-ranging notice of proposed rulemaking (the “KISS Proposal”), the Commodity Futures Trading Commission proposed (1) to codify several accepted practices that currently rely on no-action letters and similar CFTC staff guidance and (2) to…
FinCEN and Federal Banking Agencies Issue Statement on Pooling Resources for BSA Compliance
On Oct. 3, 2018, the Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation, the National Credit Union Administration, the Office of the Comptroller of the Currency and the U.S. Department of the Treasury’s Financial Crimes…
CFTC Insider Trading Enforcement Efforts Increase: Implications for Private Fund Managers
On Sept. 28, 2018, the Commodity Futures Trading Commission filed a civil enforcement action against EOX Holdings LLC, an introducing broker, and one of its registered associated persons, Andrew Gizienski. The CFTC’s complaint, which charges that EOX Holdings and Gizienski…
SEC Approves Changes to Nasdaq Stockholder Approval Requirement for Discounted Private Offerings
On Sept. 26, 2018, the SEC approved a proposal previously filed in January by The Nasdaq Stock Market LLC to amend Nasdaq Listing Rule 5635(d), the shareholder approval rules applicable to discounted private placements. Under the previous version of Nasdaq…
The New Normal in Commodity Derivatives Enforcement Actions: ‘Cooperative Enforcement’ and Implications for Private Fund Managers
In its budget request for fiscal year 2018, the CFTC outlined an increasingly muscular enforcement effort, stating that, “the Commission will utilize its enforcement resources to continue preserving market integrity[.]” This 2017 request, however, also foreshadowed a new enforcement initiative…
SEC Charges Hedge Fund Manager with Short-and-Distort Scheme
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…
Quantitative Investment Manager Sanctioned by the SEC: Lessons for Private Fund Managers
On Aug. 27, 2018, the U.S. Securities and Exchange Commission announced settlements with a U.S.-based registered investment adviser, several of its affiliates and two of its executives for alleged misconduct involving quantitative investment models that contained numerous errors.
These settlements,…