In a press release yesterday, the CFTC issued an exemptive letter, CFTC Letter No. 14-116, providing relief from certain provisions of CFTC Regulations 4.7(b) and 4.13(a)(3) that restrict marketing to the public. The exemptive relief was issued to make CFTC Regulations 4.7(b) and 4.13(a)(3) consistent with SEC Rule 506(c) of…
Investment Fund Law Blog
Advisory Alert! – Repatriation of Funds Out of China
China imposes controls on the inflow and outflow of foreign exchange. Given the involvement of State Administration of Foreign Exchange and various other governmental agencies in the process, repatriating funds from China can be a trap for the unwary. Foreign investors should familiarize themselves with the approval requirements and procedures.
Cyber Security and Investing: Steps to Help Avoid a Digital Disaster
The relentless attention being paid to cyber-attacks is driving companies to increase cyber security budgets and purchases. In turn, this has led institutional investors and asset managers to see potentially massive returns associated with companies in the cyber security market. Indeed a number of companies that have gone public have…
SEC Enforcement Update – A busy (and entertaining) week, July 28 – August 1, 2014
At the Intersection of Faith and Illiteracy. In what may have been one of the more interesting weeks this year for SEC enforcement actions, the Enforcement Division brought a number of actions last week, several of which will make you wonder if the warnings that we issued when the JOBS…
House of Representatives Passes SAFETY Act Amendment – Clarifies that liability protections are available for cyber attacks
The U.S. House of Representatives took a major positive step towards increasing the nation’s cyber security posture today when, on a voice vote, it passed H.R. 3696, the “National Cybersecurity and Critical Infrastructure Protection Act.” The NCCIP bill, co-sponsored by House Homeland Security Chairman Mike McCaul, Ranking Member Bennie G.…
Money Market Fund Reform
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…
Size Doesn’t Matter: Insider Trading Charges for $11k Profit
The Securities and Exchange Commission (the “SEC”) charged Kevin McGrath, a partner at a New York investor relations firm with insider trading. According to the SEC complaint, McGrath allegedly received confidential information from clients in order to prepare press releases. The SEC discovered McGrath used non-public information from two different…
Private Fund Managers as Broker-Dealers and How to Avoid It
Private equity firms were put on notice last year that they may be subject to registration as broker dealers when David Blass, head of the Division of Markets and Trading at the Securities and Exchange Commission (“SEC”), provided his insights at an industry conference. Since that time, the SEC has…
Lawyers as SEC Enforcement Targets, What a Fund Manager Needs to Know
In a move that should place securities lawyers and their clients on notice, Commissioner Kara Stein of the Securities and Exchange Commission (“SEC”) recently indicated that lawyers may become targets of SEC enforcement actions when a registrant has been poorly advised by its attorney and the result of that advice…
Precious Metals? Not so much. CFTC Wins Fraud Trial
On May 16, 2014, a federal court in Florida entered an Order finding in favor of the Commodity Futures Trading Commission (CFTC) following a trial against four Hunter Wise related companies and their owners on charges that they had fraudulently misrepresented the nature of precious metals transactions that resulted in…