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, plan for the future and Read more...
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 regulations to preserve the status Read more...
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 no longer be able to Read more...
Video: Dodd-Frank Act To Increase State Oversight Of Hedge Fund Advisers
Watch the video In enacting the Dodd-Frank Act, Congress significantly altered the regulatory landscape for hedge fund advisers by eliminating (effective July 21, 2011) the fewer-than-fifteen client exemption from registration pursuant to Section 203(b)(3) of the Investment Advisers Act of 1940. At the same time, Congress increased the assets under management threshold for registration as an investment adviser with the SEC. As discussed Read more...
Defining “Venture Capital Fund” Is “No Small Task”
Today, the Securities and Exchange Commission proposed a definition of “venture capital fund” for purposes of the new exemption from investment adviser registration under the Investment Advisers Act of 1940. This new exemption was created by Section 407 of the Dodd-Frank Wall Street Reform and Consumer Protection Act. Congress gave the SEC one year to issue final rules defining “venture capital Read more...
SEC’s Proposed “Family Office” Rule and Rule 260.204.9
In The Snows of Kilimanjaro, Ernest Hemingway wrote: “‘The very rich are different from you and me.’ And how someone had said to Julian, ‘Yes, they have more money.’” That is certainly true in the case of the families described in the Securities and Exchange Commission’s recently proposed family office rule. According to the SEC, “family offices” are established by Read more...
Senior-Specific Specifications Can Spell Trouble Under the CSL
Recently, the Securities and Exchange Commission announced that it had charged an investment adviser in Colorado with fraudulently recommending hedge funds to older investors. In California, we have a statute, Corporations Code Section 25234.5, that specifically prohibits broker-dealers and investment advisers, or their respective agents or representatives, from using a senior specific professional designation in the offer or sale of Read more...
Supreme Court Set To Decide Arian Controversy In Janus
The U.S. Supreme Court has scheduled oral arguments in Janus Capital Group, Inc.v. First Derivative Traders for December 7, 2010. The case concerns whether: (1) a service provider can be held primarily liable for participating in an issuer’s misstatements; and (2) whether a service provide can be held primarily liable for statements not directly and contemporaneously attributed to that service Read more...
The Dodd-Frank Act’s Impact on California’s Restrictions on Investment Adviser Performance Compensation
Prior to the enactment of the Dodd-Frank Act, Section 205 of the Investment Advisers Act of 1940 prohibited the receipt of performance compensation by an investment adviser unless the adviser was exempt from registration under Section 203(b) of the Advisers Act. Performance compensation is compensation based on the capital gains or capital appreciation in a client’s account. Performance compensation has been a common component of hedge fund Read more...
DOC To Mandate Use of New Part 2 to Form ADV
Yesterday, the Department of Corporations issued this notice to investment advisers registered with the it. The notice advises that the Department is adopting the new Part 2 to Form ADV effective October 12, 2010. The Department has announced the following compliance dates: As of January 1, 2011 all new investment adviser applicants will have to file, through the Investment Adviser Registration Depository, the Read more...
