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The weekly news source for investment management legal and compliance professionals

Topic: Hedge Funds

SEC Charges Hedge Fund Manager with Misrepresentation, Freezes Assets

March 2, 2018
Misrepresentation is misrepresentation, but sometime misrepresentation can go so far that a federal court has to step in and put a stop to the alleged activity until the charges are resolved. That is the situation that a purported hedge fund manager found itself in earlier this month.

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SEC Data Show Continued Growth of Private Funds

February 9, 2018
Private funds, whether hedge funds, private equity funds or most other types, continued to grow at a steady rate through the second quarter of 2017.

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PF Manager Settles Charges Involving Conflicts, Disclosure and Exam Findings

January 5, 2018
A private fund manager that the SEC accused of not acting in a timely fashion on multiple examination findings was taken to federal court by the agency, which charged him with, among other things, engaging in conflicted transactions and misleading investors. The manager, Louis Mohlman, Jr. and his two advisory firms reached a settlement with the SEC the same day.

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Hedge Fund Compliance: Insider Trading, Allocation, Alternative Data, and More

January 5, 2018
Advisers managing hedge funds, to a large extent, face many of the same issues that advisers managing other funds do. Requirements regarding fees and expenses, custody, books and records and more must be met. There are other compliance issues, however, where the SEC can be expected to pay particular attention to hedge funds Ė and managing advisers would be wise to make sure they are on top of them.

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Private Fund Adviser and Owner/CCO Settle Multiple Charges with SEC

August 18, 2017
The SEC is long past the day of being unfamiliar with private fund advisers. It knows what to look for when it investigates and isnít shy about enforcement actions. When it finds a situation where the owner of the advisory firm is also the chief compliance officer, donít be surprised if it makes an example of the case.

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SEC Scrutinizes PE Fund Manager Adherence to Operating Documents

July 20, 2017
Private equity fund managers may not be as used to SEC oversight as are other advisers. They would be wise, then, to regard a recent agency settlement as a lesson learned: The SEC will scrutinize books and records to make sure fund managers are operating within the limits of their operating documents. Those that are not may find themselves facing an enforcement action.

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Form PF FAQs Clarify Just What the SEC Wants

February 17, 2017
Those seeking answers when they complete Form PF now have another source to consult: a new set of answers to frequently asked questions issued recently by the SEC Division of Investment Management.

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SEC Focus on Conflicts of Interest Leads to Settlement with Private Fund Adviser

February 3, 2017
Disclosure of conflicts of interest has long been a priority for the SEC in its policing of financial service firms. So when the agency conducted an examination of a public equity fund adviser in 2014 and found what it believed to be potential conflicts of interest that were not disclosed, it mounted an enforcement action that resulted in a settlement.

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Private Fund Adviser Charged with Failure to Disclose Conflicted Transactions

January 13, 2017
The SECís enforcement activities against private fund advisers apparently are not limited to those that registered with the agency. Consider the case of Chicago-based Augustine Capital Management, which, along with two of its three owners, was recently charged by the SEC with a myriad of allegations, including failure to disclose conflicted transactions to investors.

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Hedge Fund Settles SEC Charges That It Failed to Detect Insider Trading

October 28, 2016
Failure to detect insider trading may result in consequences as serious as those for insider trading itself. Just ask this hedge fund manager.

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Private Equity Adviser Feels the Sting of SEC’s Fee, Expense and Disclosure Focus

September 23, 2016
Itís just the latest one, but itís telling: Private equity fund adviser First Reserve Management on September 14 settled SEC claims that it failed to disclose conflicts of interest involving fees and expenses it charged its funds.

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Hedge Fund Manager Gets 15 Months for Obstructing SEC Investigation

September 15, 2016
Donít think it stops with disgorgement and a civil money penalty. Some advisory firm managers may face jail time if the government thinks the offense is serious enough.

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Private Equity Adviser Exams: Fees and Expenses Likely to Dominate the Visit

August 19, 2016
Advisers to private equity funds preparing for a visit from SEC examiners need to keep their eye on the ball: While examiners may inquire into a number of areas, the bulk of the visit is likely to be spent on the fees and expenses charged to funds and portfolio companies.

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Senators Request Private Equity Investor Bulletin

July 22, 2016
SEC chair Mary Jo White found what may have been an unexpected missive in her office mailbox a few days ago: a letter from eight Senate Democrats and independent senator Bernie Sanders requesting that the agency publish an investor bulletin "that consolidates the SECís findings and warnings with respect to private equity investments."

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IAA Wants New Accredited Investor Definition to Include Persons Retaining Advisers

July 15, 2016
Before the SEC adopts a new definition of "accredited investor," the Investment Adviser Association wants that definition to include persons who hire a registered investment adviser to manage their investments on a discretionary basis. But if the Commission does so, it will be going against the wishes of its staff, which recommended against such a move.

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Two Hedge Fund Managers at Same Firm Face Separate Insider Trading Charges

June 17, 2016
Whatís worse than one hedge fund manager charged with insider trading at your firm? Two hedge fund managers charged with insider trading. This might usually be said in humor, but not in this case.

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PE Adviser Settles with SEC for Failing to Register as a Broker-Dealer

June 3, 2016
Is it a harbinger of things to come? A private equity fund adviser and its owner on June 1 paid more than $3.1 million to settle charges from the SEC that they, among other things, charged fees for brokerage services, but failed to register as a broker-dealer with the Commission.

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Proposed Incentive-Based Compensation Rule: Advisers Should Pay Attention

May 19, 2016
The proposed rule issued May 6 by the SEC and five other federal agencies that would prohibit financial institutions from offering incentive-based compensation encouraging inappropriate risk taking should be viewed with concern by at least large investment advisers. While the rule would affect only advisers with more than $1 billion in assets, the way the SEC counts such advisers may mean that some firms that believe they are under the threshold may actually fall within it.

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Ceresney Names Private Equity Enforcement Targets, Counters Defense Arguments

May 19, 2016
When it comes to playing offense in the private equity arena, SEC Division of Enforcement director Andrew Ceresney is not only making clear what the agencyís targets are Ė heís seeking to neutralize the opposition by letting advisers and their attorneys know what defenses wonít work.

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Final Version of SEC Strategic Plan Lists Guidance for Private Fund Advisers

April 29, 2016
The SEC on April 22 issued the final version of its five-year strategic plan. The adopted version of the "Strategic Plan Fiscal Years 2014-2018" looks remarkably like the February 2014 draft version, with one of the few exceptions being the addition of providing guidance to private fund advisers.

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