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CALIFORNIA CORPORATE & SECURITIES LAW

Be Careful What You Say When Breaking Up

CalPERS Renews State Street Custody Contract If you break up with your spouse and then announce to the world that s/he is a liar and a cheat, you can expect to raise a few eyebrows if you later announce that you are renewing your vows.  This is akin the situation now being faced by the State of California…

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SEC Slays Redwoods At Fearsome Pace

Yesterday, was a big day for both the regulated and the unregulated adviser industry. “The very rich are different from you and me . . . they have more money” The Securities and Exchange Commission adopted its final “family office” rules.  According to the SEC, “family offices” are established by wealthy families to manage their riches,…

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Commissioner Takes Emergency Action To Put More Time On The Clock For Rule 260.204.9

Yesterday, Commissioner Preston DuFauchard started the process for adding six months to the lifespan of Rule 260.204.9.  The Commissioner took this action in light of the imminent expiration of the “private adviser” exemption set forth in Section 203(b)(3) of the Investment Advisers Act of 1940.  The Dodd-Frank Act eliminates this exemption effective July 21, 2011. SEC To Adopt Final…

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Commissioner Announces Action To Alleviate Exempt Adviser Uncertainty

This afternoon, Commissioner Preston DuFauchard released this letter regarding the upcoming demise of the federal private adviser exemption (Section 203(b)(3) of the Investment Adviser Act of 1940).  The Commissioner’s letter is in response to concerns about the continued viability of Rule 260.204.9 which explicitly refers to Section 203(b)(3).  Essentially, the Commissioner is announcing that he will be issuing emergency…

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How Soon Hath Time! July 21 Deadline Looms For Investment Advisers But Grace May Be At Hand

The hasting days fly on with full career while the SEC proceeds with rulemaking to implement the Dodd-Frank Act’s changes to the regulation of investment advisers.  Last week, Associate Director Robert E. Plaze in the SEC’s Division of Investment Management confirmed that the SEC intendes to complete required rulemaking by July 21, 2011 in this letter to David Massey, the President…

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Placement Agent Law Clean-Up Amendments Introduced

As I mentioned in this March 11 posting, Senator Ed Hernandez has introduced a bill, SB 398, that is intended to clean-up some of the many questions arising under legislation, AB 1743, that was enacted last session.  In general, AB 1743 requires placement agents for investment funds and advisers seeking access to CalPERS or other California public retirement systems…

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Commissioner Previews Potential Private Fund Adviser Rule Changes

If you’re reading this blog, then you had a better Ides of March than Julius Caesar did in 44 B.C.E.  In this March 5 post, I reported that the Commissioner of Corporations would be seeking comments on proposed amendments to Rule 260.204.9.  Yesterday, the Commissioner issued this Invitation for Comments.  As discussed in several earlier posts,…

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Bill To Amend Placement Agent Law Introduced

As discussed in this posting from last October, the legislature enacted AB 1743 to require placement agents for funds and advisers seeking access to CalPERS or other California public retirement systems to register as lobbyists.  Although I had commented on the bill, I was less than pleased with the final product. Senator Ed Hernandez, who…

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Video: What’s In Store For California’s Exemption For Venture Capital Fund Managers?

View the video Managers of venture capital funds have largely avoided registration as investment advisers.   The Dodd-Frank Act has significantly changed the exemptions from federal registration and will cause California change its exemptions as well.  This video discusses what may be in store for venture capital managers.

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Guest Post: Are Some California Fund Manager Performance Fees in Doubt?

By Matthew J. Ertman The Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act) repeal of the private adviser exemption could eliminate the ability of some California fund managers to charge performance fees (often referred to as the manager’s carried interest). Effective July 21, 2011, private equity, venture capital and hedge fund managers will…

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