Ready to Take Advantage of JOBS Act Changes? Be Patient

June 6, 2012 § 3 Comments

By now, most private fund managers are aware that the Jumpstart Our Business Startups (JOBS) Act instructed the SEC to remove the ban on general solicitation and advertising from the exemption that most funds rely on when offering their interests to investors. Many managers are anxious to begin advertising and expanding their marketing efforts. Doing so before the SEC issues its final rules, however, is extremely risky for a number of reasons summarized below. We caution managers to hold off until those rules are in place which is expected to be in early July. « Read the rest of this entry »

What SEC Registration Means for Hedge Fund Advisers

May 30, 2012 Comments Off on What SEC Registration Means for Hedge Fund Advisers

As noted in a previous post, the Deputy Director of the SEC’s Office of Compliance Inspections and Examinations (OCIE) recently gave a speech that quantified some of the effects that Dodd-Frank has had on registered investment advisers. OCIE’s Deputy Director also suggested ten takeaways for advisers to hedge funds now that they are registered. The list is also a helpful reminder for previously registered advisers. « Read the rest of this entry »

Dodd-Frank Leads to 50% Increase in SEC-Registered Private Fund Managers

May 15, 2012 § 1 Comment

According to comments by the Deputy Director of the SEC’s Office of Compliance Inspections and Enforcement, since passage of the Dodd-Frank Act (July 2011), the number of SEC-registered private fund advisers has grown from approximately 2,550 to approximately 4,000–an increase of 52%.

Other items of interest from the speech: « Read the rest of this entry »

Misleading Presentation of Model Results Leads to SEC Fraud Charges

May 9, 2012 Comments Off on Misleading Presentation of Model Results Leads to SEC Fraud Charges

The Securities and Exchange Commission has charged a father-and-son duo of hedge fund managers with securities fraud stemming from claims about their investment strategy and past performance. According to the SEC’s order, Gabriel and Marco Bitran raised millions of dollars for their hedge funds through, among other things, very successful performance track records based on actual trades from 1998 to the inception of their hedge funds. In fact, those track records were based on hypothetical historical investments. In settling the SEC action, the Bitrans and their fund management entities agreed to pay disgorgement of $4.3 million, other monetary penalties and be barred from the securities industry. « Read the rest of this entry »

Financial Services Committee Proposes Investment Adviser SROs

April 26, 2012 Comments Off on Financial Services Committee Proposes Investment Adviser SROs

Rep. Spencer Bachus (R-AL), Chair of the House Financial Services Committee, and Rep. Carolyn McCarthy (D-NY) introduced legislation–the Investment Adviser Oversight Act of 2012–that would create new self-regulatory organizations intended to provide more efficient and effective oversight of the retail investment advisory industry. « Read the rest of this entry »