In its highly anticipated decision in U.S. v. Newman, the U.S. Court of Appeals for the Second Circuit held on Dec. 10 that to sustain insider trading charges against a tippee who trades on material nonpublic information, the government must prove that the tippee knew that the tipper disclosed the information in breach of
SEC Enforcement
Fund Formation and Incentives Report
Schulte Roth & Zabel has partnered with Private Equity International to release Fund Formation and Incentives Report, a research study of senior private equity managers. The report provides an analysis of the issues affecting general partner operations, such as waterfall structures, key man clauses, compensation and recruitment. Based on an online survey and in-depth…
Funds Face New Sanctions, AML Risks in Wake of Escalating U.S.–Russia Tensions
The United States and others have imposed economic sanctions and issued anti-money laundering advisories in the wake of the growing political tensions between the United States and Russia over the fate of Ukraine. Click here for a summary of the actions taken by authorities to date and discusses compliance implications for investment funds. Fund managers…
SEC Confirmation that Fixed-Income Commissions Can Satisfy the Section 28(e) “Soft Dollars” Safe Harbor
Registered investment advisers in the process of planning an annual compliance review will generally include a review of their best execution processes and their use of so-called “soft dollars.” Managers that trade in fixed-income securities may find it useful to review a no-action letter issued earlier this year by the Division of Trading and Markets…
Caught in the Wash
Traders selling, and then repurchasing, the same stock, bond, option or future, is a topic facing increasing regulatory scrutiny. For systematic hedge funds trading in the U.S. — some of whom are shelving out seven figure sums for internal technology or facing expensive inquiries due to accidental violations — it has proved an expensive development.…
Keeping Current: SEC Update: Enforcement Program Taking Shape Under New Leadership
U.S. Securities and Exchange Commission Chairman Mary Jo White in mid-June announced an important change to the SEC’s policy of permitting parties to settle SEC securities claims without admitting wrongdoing. Chairman White’s announcement follows other remarks that further illuminate how co-directors George S. Canellos and Andrew J. Ceresney will oversee the SEC’s Enforcement Division under…
SEC Enforcement Division Increases the Pace of Rule 105 Investigations
The Enforcement Division of the Securities and Exchange Commission (“SEC”) recently increased the pace of investigations of potential violations of Rule 105 of Regulation M under the Securities Exchange Act of 1934. Rule 105 makes it unlawful for any person during the “Rule 105 restricted period” to “sell short” an equity security that is being offered for cash pursuant to a registration statement in a firm-commitment, underwritten offering and purchase the offered securities. Hedge fund managers should review their compliance with the Rule.
Continue Reading SEC Enforcement Division Increases the Pace of Rule 105 Investigations
SEC Update: Enforcement Program Taking Shape Under New Leadership
U.S. Securities and Exchange Commission Chairman Mary Jo White last week announced an important change to the SEC’s policy of permitting parties to settle SEC securities claims without admitting wrongdoing. Chairman White’s announcement follows other remarks that further illuminate how Co-Directors George S. Canellos and Andrew J. Ceresney will oversee the SEC’s Enforcement Division under…
SEC Focuses on Broker-Dealer Registration Issues Facing Private Fund Managers
The Securities and Exchange Commission recently has made broker-dealer registration an area of focus for private fund managers. On March 8, 2013, the SEC filed and settled charges against a private fund manager, one of the manager’s senior executives and an external marketing consultant regarding the consultant’s failure to register as a broker-dealer. Just a…