Investment Fund Law Blog


Updates and Insights on Legal Issues Facing Fund Managers and Investors

Category Archives: Registered Investment Companies

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SEC Proposes Rules to Modernize Reporting by Investment Advisers and Investment Companies

Posted in Advisory, Investment Advisers, Private Funds, Registered Investment Companies
The Securities and Exchange Commission (SEC) today proposed rules, forms and amendments to modernize and enhance the reporting and disclosure of information by investment advisers and investment companies. Investment advisers. The investment adviser proposed rules would amend the investment adviser registration and reporting form (Form ADV), and Investment Advisers Act Rule 204-2. On Form ADV,… Continue Reading

Cybersecurity Guidance Issued by the SEC’s Division of Investment Management

Posted in Advisory, Investment Advisers, Registered Investment Companies
The Division of Investment Management (the “Division”) of the Securities and Exchange Commission issued a cybersecurity guidance identifying cybersecurity of registered investment companies (“funds”) and registered investment advisers (“advisers”) as an important issue. Recognizing the rapidly changing nature of cyber threats and consequently, the necessity for funds and advisers to protect sensitive information including information… Continue Reading

SEC Updates Personal Gift and Entertainment Guidance for Fund Advisory

Posted in Investment Advisers, Registered Investment Companies
In a February 2015 Guidance Update, the Securities and Exchange Commission’s Division of Investment Management (“SEC”), provided guidance on the acceptance of gifts or entertainment by fund advisory personnel under Section 17(e)(1) of the Investment Company Act of 1940 (the “Act”). Section 17(e)(1) provides that any affiliated person of a registered investment company, or any… Continue Reading

Breaking All the Rules – Wealth Management Group Under Cease and Desist Order

Posted in Advisory, Investment Advisers, Registered Investment Companies
The Securities and Exchange Commission (“SEC”) issued a cease-and-desist order on February 19, 2015 against SEC-registered Logical Wealth Management, Inc. and owner, Daniel J. Gopen, (together, “Respondents”).  The list of violations the SEC found the Respondents committed is extensive and includes improper registration, compliance, and recordkeeping. The SEC found the Respondents exaggerated their assets under… Continue Reading

Client Alert: The Second Circuit Raises the Bar for Insider Trading Convictions

Posted in Advisory, Broker-Dealers, China Funds, Investment Advisers, Private Equity, Private Funds, Registered Investment Companies, Uncategorized
By William M. Sullivan, Jr. and Jay B. Gould Under the Second Circuit’s new ruling, prosecutors have two large hurdles they must clear to convict under securities laws. First, they must prove that a defendant knew that the source of inside information disclosed tips in exchange for a personal benefit. Second, the definition of “personal… Continue Reading

CFTC Enters Consent Order for Permanent Injunction Against AlphaMetrix Group

Posted in Investment Advisers, Private Funds, Registered Investment Companies
The U.S. Commodity Futures Trading Commission (CFTC) announced that on December 16, 2014, the U.S. District Court for the Northern District of Illinois entered a Consent Order for permanent injunction against AlphaMetrix, LLC (AlphaMetrix), a Chicago-based Commodity Pool Operator (CPO) and Commodity Trading Advisor (CTA), and its parent company AlphaMetrix Group, LLC (AlphaMetrix Group). The… Continue Reading

Money Market Fund Reform

Posted in Advisory, Registered Investment Companies
The Securities and Exchange Commission (SEC) yesterday adopted a series of amendments to the rules that govern money market funds.  The most controversial of these amendments will require institutional prime and tax-exempt money market funds to maintain a floating net asset value (NAV) and will allow the boards of institutional and retail prime and tax-exempt… Continue Reading

Admit It! SEC May Seek Admissions of Wrongdoing in Settlements

Posted in Advisory, Guest Post, Registered Investment Companies
Written by: Marc H. Axelbaum, Sarah A. Good, G. Derek Andreson, and Emily Burkett The U.S. Securities and Exchange Commission (“SEC”) is poised to modify its “no-admit, no-deny” policy to seek more admissions of wrongdoing from defendants as a condition of settlement in enforcement cases. The change comes on the heels of recent criticism of… Continue Reading

SEC Examinations Target Private Equity and Hedge Fund Managers for 2013

Posted in Broker-Dealers, Investment Advisers, Private Equity, Private Funds, Registered Investment Companies
On February 21, 2013, the Staff of the Securities and Exchange Commission (the “Staff” and the “SEC,” respectively) published its 2013 priorities for the National Examination Program (“NEP”) in order to provide registrants with the opportunity to bring their organizations into compliance with the areas that are perceived by the Staff to have heightened risk. … Continue Reading

Mutual Fund Lobby Trashes General Solicitation for Private Funds (Surprise!)

Posted in Private Funds, Registered Investment Companies
Written by:  Jay B. Gould  The recently enacted JOBS Act[1] requires the Securities and Exchange Commission (“SEC”) to promulgate rules that would effectively repeal the ban on general solicitation and general advertising under Rule 506 of Regulation D by private issuers, including private funds.  Pursuant to the JOBS Act, the SEC has 90 days from… Continue Reading

Over $3.3 Million Charges Against Morgan Stanley Investment Management for Improper Fee Arrangement

Posted in Investment Advisers, Registered Investment Companies
Written by Jay Gould On Wednesday, November 16, 2011, the SEC charged Morgan Stanley Investment Management (“MSIM”) with violating securities laws in a fee arrangement that costs a fund and its investors approximately $1.8 million in sub-adviser fees. MSIM is the primary adviser to The Malaysia Fund (the “Fund”), a closed-end investment company that invests… Continue Reading

President’s Working Group Proposes Money Market Fund Reforms

Posted in Registered Investment Companies
Following the September 2008 run on money market funds, which began following the failure of Lehman Brothers Holdings, Inc., the Treasury Department requested that the President’s Working Group on Financial Markets (“PWG”) prepare a report on the regulatory changes needed to address systemic risk and to reduce the susceptibility of money market funds to runs.… Continue Reading

Funds Need Better Derivatives Disclosure

Posted in Private Funds, Registered Investment Companies
Earlier this year the SEC staff commenced a review to evaluate the use of derivatives by mutual funds, exchange-traded funds and other investment companies, including, among other things, whether existing prospectus disclosures adequately address the particular risks created by derivatives.  In a July 30, 2010 letter to the Investment Company Institute, the SEC staff indicated… Continue Reading