What SEC Registration Means for Hedge Fund Advisers

May 30, 2012 § Leave a comment

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 § Leave a comment

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 § Leave a comment

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 »

Investment Advisers and Social Media

April 19, 2012 § Leave a comment

Growing numbers of investment advisers and fund managers are using social media–Facebook, LinkedIn, Twitter, blogs, etc. After passage of the JOBS Act–and removal of the ban on general solicitation–we expect even more widespread use of these outlets to reach new markets and clients.

Advisers and private fund managers should recognize that these new forms of communication remain under the same antifraud, compliance, and recordkeeping requirements as traditional forms of advertising and communications. The SEC has already charged one adviser with fraud arising from offering fictitious securities through social media sites.

In recognition of the growing role of social media use by advisers, SEC staff has provided guidance for advisers when reviewing their compliance programs to address social media use. « Read the rest of this entry »