Written by Jay Gould, Ildiko Duckor and Peter Chess On January 4, 2012, the Securities and Exchange Commission (SEC) released a National Examination Risk Alert addressing investment adviser use of social media.  Investment advisers should have policies regarding the use of social media, and the SEC outlined specific factors that need to be addressed by these policies.  The SEC’s guidance could be particularly important given the “crowdfunding” legislation Congress is currently considering. The January 4, 2012 National Examination Risk Alert (January Alert) states...
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Written by Peter J. Chess Many fund managers are required to submit reports every month and/or every five years to the Federal Reserve Bank of New York (“FRBNY”).  The Department of the Treasury’s Treasury International Capital (“TIC”) data reporting system has two such upcoming reporting deadlines.     TIC Form SLT The Aggregate Holdings of Long-Term Securities by U.S. and Foreign Residents (“TIC Form SLT”) is required to be submitted by entities with consolidated reportable holdings and issuances (positions) with a fair...
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The California Commissioner of Corporations (Commissioner) has released a notice regarding readoption of the emergency regulation on private adviser exemption. On January 5, 2012, the Commissioner will file with the Office of Administrative Law (OAL) the readoption of emergency regulations to extend the effectiveness of Rule 260.204.9 (10 C.C.R. §260.204.9) for a period of no longer than 90 days.    The changes to the rule will extend the current exemption from registration for investment advisers who are deemed private advisers for an additional 90 days.  The...
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Written by Peter J. Chess On November 30, 2011, FINRA and the SEC’s Office of Compliance Inspections and Examinations (OCIE) released a National Exam Risk Alert on effective procedures and policies for broker-dealer branch inspections. This follows other recent guidance for broker-dealers regarding the Market Access Rule and reasonable investigations in Regulation D Offerings, in addition to recent FINRA sanctions against broker-dealers related to Regulation D Offerings. Under Sections 15(b)(4)(E) and 15(b)(6)(A) of the Exchange Act, the SEC can impose sanctions on any firm or any...
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Written by Michael Wu and Judy Deng The Year of Rabbit continued to see the proliferation of RMB funds and portfolio investments made by RMB funds. As of Q3 of 2011, 63 RMB funds were raised in mainland China and the total capital raised for investments in mainland China was estimated to be RMB4.2 billion (Source: Zero2IPO). Perhaps no longer a new term, “RMB funds” generally refer to the investment funds organized as corporations, limited partnerships or other unincorporated forms in China that invest in non-public companies primarily located in China. Over the past five years,...
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Written by Ildiko Duckor An entity that meets the definition of a “Large Trader” after October 3, 2011 must file its initial Form 13H with the SEC by December 1, 2011 to be assigned a large trader identification number (LTID).  The filing is done electronically through the SEC’s EDGAR system.  The LTID must be disclosed to registered broker-dealers effecting transactions on behalf of the Large Trader.  If you as a general partner or investment adviser (including any entities or individuals over which you have control, e.g., the right to vote or direct the vote...
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Written by Jay Gould On October 26, 2011, the SEC adopted a new rule requiring SEC-registered advisers to hedge funds and other private funds with at least $150 million in private fund assets under management to report information to the Financial Stability Oversight Council (“FSOC”) to enable it to monitor risk to the U.S. financial system.  The information which must be reported to the FSOC on Form PF will remain confidential, and not accessible to the general public. These private fund advisers are divided into (1) large private fund advisers and (2) smaller private fund...
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Written by Jay Gould On October 18, 2011, the SEC released a notice of FINRA’s filing of Proposed Rule 5123 (the “Proposed Rule”) which would require FINRA members and associated persons to: 1) provide to investors disclosure documents in connection with private placements prior to sale and 2) file with FINRA such disclosure documents within 15 days after the date of first sale and any subsequent amendments.  These proposed changes would significantly affect fund managers who offer or sell their funds that are exempt from registration pursuant to Section 3(c)(1) of the...
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Written by Michael Wu By order released by the SEC on November 10, 2011, Western Pacific Capital Management LLC, a San Diego-based investment adviser, and its President, Kevin James O’Rourke, were charged with fraud for failing to disclose a conflict of interest to clients and materially misrepresenting the liquidity of The Lighthouse Fund LP, a hedge fund they formed and managed.  Western Capital and O’Rourke urged clients to invest in a security without disclosing that Western Pacific would receive a 10 percent commission. They also failed to register as a broker, failed to...
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Date & Time11/10/2011 12:30 pm – 7:00 pm PT12:30 pm – 5:30 pm PTWorkshop5:30 pm – 6:30 pm PT Panel and Q&A6:30 pm PTCocktails LocationPillsbury’s SF office50 Fremont StreetSan Francisco, CA 94105 Join us for an interactive, instructional workshop to learn step-by-step how to create unique and individualized marketing material to attract and engage investors and raise capital. Who Should Attend: Emerging Funds Managers Established Funds Managers Hedge Fund Marketers Pre-Launch Managers Fund of Funds Managers This one day hedge fund marketing event will...
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