Investment Advisers Act of 1940 Investment Adviser

News & Analysis as of

SEC Updates Form ADV

The SEC has adopted final rules requiring investment advisers to provide additional information on Form ADV and other matters. The final rules: - require information about an investment adviser’s separately managed...more

Private Fund Advisers Must Pay Close Attention to Nuances under Pay-to-Play Restrictions in Light of Upcoming Elections Nationwide

As the elections approach nationwide, advisers to private investment funds with current or prospective state or local government entity investors should be mindful of political activities by their personnel which could raise...more

SEC Busts Apollo for Disclosure and Supervisory Failures

The SEC charged four private equity fund advisers affiliated with Apollo Global Management for misleading fund investors about fees and a loan agreement and failing to supervise a senior partner who charged personal expenses...more

Putting a Premium on Illiquidity: Some Reflections on the SEC’s Scrutiny of Valuation Practices and Disclosures

Valuation is typically near the top of the list when the SEC’s enforcement division and exam staff disclose their priority topics for private funds.  We expect that trend to continue and, if anything, the focus on valuation...more

Private Fund Advisers Must Pay Close Attention to Nuances under Pay-to-Play Restrictions in Light of Upcoming Elections Nationwide

As the elections approach nationwide, advisers to private investment funds with current or prospective state or local government entity investors should be mindful of political activities by their personnel which could raise...more

New Jersey Appellate Court Clarifies Definition of Compensation under Advisers Act

On August 12, 2016, the United States Court of Appeals for the Third Circuit affirmed the decision of the District Court of New Jersey and held in United States v. Everett C. Miller that the defendant was an “investment...more

SEC Increases Net-Worth Test of the Qualified Client Standard

Effective August 15, 2016, the Securities and Exchange Commission (SEC) is increasing the net-worth test of the “qualified client” standard from $2 million to $2.1 million. Registered investment advisers that charge...more

SEC Issues Order Raising Threshold for Net Worth Test to Adjust for Inflation

On June 14, 2016, the Securities and Exchange Commission (the “SEC”) issued an order, effective August 15, 2016, with respect to Rule 205-3 under the Investment Advisers Act of 1940 (the “Advisers Act”), raising the net worth...more

SEC Proposes Business Continuity and Transition Plan Requirements for Investment Advisers; Staff Issues Guidance for Registered...

On June 28, 2016, the US Securities and Exchange Commission (SEC) proposed new Rule 206(4)-4 (Proposed Rule) under the Investment Advisers Act of 1940, as amended (Advisers Act) and also proposed amendments to certain...more

SEC Proposes Rule Requiring Investment Advisers to Adopt Business Continuity and Transition Plans; Division of Investment...

The U.S. Securities and Exchange Commission (SEC) on June 28, 2016, proposed new Rule 206(4)-4 (Proposed Rule) under the Investment Advisers Act of 1940 (Advisers Act). The Proposed Rule would require every SEC-registered...more

SEC Proposes Rule Requiring Investment Advisers to Adopt Business Continuity and Transition Plans

The Securities and Exchange Commission (“SEC”) has recently proposed a new rule that would require SEC-registered investment advisers to adopt and implement written business continuity and transition plans (“BCP”) reasonably...more

2016/07/12 SEC Adopts Inflation-Based Adjustment to “Qualified Client” Thresholds

The U.S. Securities and Exchange Commission issued a final order (Order) on June 14, 2016, to adjust for inflation the “qualified client” thresholds applicable when a registered investment adviser charges a performance fee in...more

SEC Increases Performance Fee Thresholds

As noted in a previous alert, the Securities and Exchange Commission has now issued an Order, effective as of August 15, 2016 (the "Effective Date"), which amends SEC Rule 205-3 (the “Performance Fee Rule”) under the...more

SEC Proposal Would Require Business Continuity and Transition Plans for Investment Advisers

Citing the ongoing risk of terrorist and cyber-attacks, the 2008 financial crisis, and Hurricanes Katrina and Sandy, the Securities and Exchange Commission (“SEC”) has issued proposed rules under the Investment Advisers Act...more

SEC Raises ‘Qualified Client' Net Worth Threshold from $2 Million to $2.1 Million

Rule 205-3 under the Investment Advisers Act of 1940 permits investment advisers to charge performance- based compensation (including performance and incentive fees by private funds) only to “qualified clients.” On June 14,...more

SEC Increases Net Worth Threshold for “Qualified Clients” under Rule 205-3 of the Advisers Act

On June 14, 2016, the SEC issued an order (the “Order”) to increase the net worth threshold for “qualified clients” under Rule 205-3 of the Investment Advisers Act of 1940, as amended (the “Advisers Act”), from $2 million to...more

Financial Services Weekly News - June 2016 #4

Regulatory Developments - SEC Issues Order Approving Inflation Adjustments to “Qualified Client” Dollar Thresholds for Investment Adviser Performance Fee Rule - On June 14, the SEC issued an order approving...more

SEC Settles with Private Equity Fund Adviser Charged with Acting as an Unregistered Broker

A recent Securities and Exchange Commission (SEC) settlement order highlights the importance that the SEC has placed on the issue of broker-dealer registration for the private equity industry. On June 1, 2016, the SEC...more

SEC Issues Order Increasing the Net Worth Test Under Rule 205-3 Under the Investment Advisers Act of 1940 to $2.1 Million

Section 205(a)(1) of the Investment Advisers Act of 1940 (the “Advisers Act”) generally prohibits an investment adviser from entering into, extending, renewing, or performing any investment advisory contract that provides for...more

Pending Legislation Would Streamline Regulation of Private Equity

On June 16, 2016, the House Financial Services Committee approved the Investment Advisers Modernization Act of 2016 (H.R. 5424) as part of a package of several economic growth bills. The bill passed with a vote of 47-12 and...more

"SEC Charges Private Equity Fund Adviser as an Unregistered Broker"

On June 1, 2016, the Securities and Exchange Commission (the "SEC") accepted a settlement offer from a registered investment adviser of private equity funds, and its founder, principal and managing member. The settlement...more

SEC Charges Private Equity Adviser for Unregistered Brokerage Activity

The U.S. Securities and Exchange Commission (SEC) on June 1, 2016 announced a settled enforcement action against a private equity fund manager (Adviser) for acting as a broker-dealer without registering. The case is...more

Lessons From SEC Sanctions Against Blackstreet

On June 1, 2016, the U.S. Securities and Exchange Commission issued an administrative order sanctioning Blackstreet Capital Management LLC and Blackstreet’s managing member and principal owner, Murry N. Gunty, for acting as...more

Cease and Desist Proceedings Against an Asset Manager for Acting as an Unlicensed Broker-Dealer

Industry participants are well-advised to review their practices to ensure compliance with the Advisers Act, and the SEC’s and SEC’s Staff’s interpretations of when registration as a broker-dealer is required....more

Order Entered Against Private Equity Fund Adviser for Broker-Dealer Activity

Under the notoriously ill-considered Dodd-Frank Wall Street Reform and Consumer Protection Act, previously exempt advisers to private equity funds are subject to Securities and Exchange Commission reporting requirements and...more

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