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The weekly news source for investment management legal and compliance professionals

Anti-Money Laundering Rule for Advisers Proposed by FinCEN

After more than 12 years of false starts, an anti-money laundering rule for advisers may just get through this time. The Treasury Department’s Financial Crimes Enforcement Network on August 25 issued an 86-page proposed rule that, if adopted, would require investment advisers to join banks, broker-dealers and other financial organizations in adopting an anti-money laundering program and filing suspicious activity reports.
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Accurate Small Print Disclosures Will Not Make Up for Misrepresentations

"It’s in the written materials" is not an adequate defense for firms whose representatives otherwise misinform clients about the risk level of investments. Advisers need to review all representations, written and oral, to ensure that they provide accurate and consistent disclosure. Two Citigroup affiliates learned this lesson on August 17, after they agreed to pay almost $180 million in disgorgement and interest to settle SEC charges that they defrauded investors in two hedge funds.
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Anti-Money Laundering: Don’t Wait for the Rule to Create a Program

After years of false starts, a Treasury Department rule requiring investment advisers to create an anti-money laundering program may be on its way, but that doesn’t mean you should wait before adopting anti-money laundering policies and procedures. Even without a rule, the SEC expects advisers to have anti-money laundering programs in place. If you haven’t created one yet, do so now.
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Marketing in Europe: What to Do in the Wake of the Latest EU Development

U.S. advisers seeking to market alternative investment funds in the European Union may be disappointed by a recent EU body’s recommendation that an EU-wide marketing passport not be extended to U.S. firms. But the failure to recommend the passport, which would have simplified the business of marketing alternative investment funds in Europe, does not prevent U.S. firms from marketing in Europe – they just need to do so within the existing rules.
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Electronic Communication Compliance: One Size Does Not Fit All

Make sure you’re on top of employee email, instant messages and related electronic communications. Failure to do so may lead not only to violations of SEC books and records requirements, but to questions from examiners or investigators. Be aware, however, that electronic communication compliance is an art as well as a science.
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