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Articles by Stuart E. Fross
AIFMD II And Evergreen Private Credit Fundsfor US Managers
FL Foley & Lardner More Foley & Lardner LLP looks beyond the law to focus on the constantly evolving demands facing our clients and their industries. With over 1,100 lawyers in 24 offices across the United States, Mexico, Europe and Asia, Foley approaches client service by first understanding our clients’ priorities, objectives and challenges.
AIFMD II and Evergreen Private Credit Funds for US Managers | JD Supra
Private Credit Funds have staked out a central role in the global economy, topping out at $2.1 trillion as of year-end 2024, with three-quarters of the global exposure within the United States.1 Private credit has been gaining market share on syndicated public loans steadily over time.
No Action Letter - Regulation D Rule 506(c)
The SEC now permits public marketing of private placements, without burdensome investor wealth verification requirements, if the investment is big enough.
No Action Letter – Regulation D Rule 506(c) | JD Supra
The SEC now permits public marketing of private placements, without burdensome investor wealth verification requirements, if the investment is big enough.
SEC Simplifies Verification for Private Placement Investors
The SEC now permits public marketing of private placements, without burdensome investor wealth verification requirements, if the investment is big enough.
SEC Proposed Safeguarding Rule | JD Supra
On February 15th 2023, the Securities and Exchange Commission (the “SEC”, or the “Commission”) proposed a new safeguarding rule. Comments must be received by the SEC on or before 60 days after the rule’s publication in the Federal Registrar. What is the Proposed Safeguarding Rule? If adopted, the safeguarding rule will be new rule 223-1 under the Investment Advisers Act (the “Advisers Act”) and would replace the current custody rule.
AIFMD 2 and Loan Origination Funds | JD Supra
The European Parliament’s Committee on Economic and Monetary Affairs (the “ECON”) published February 2, 2023, proposed text of AIFMD 2.
AIFMD 2 and Loan Origination Funds
Legal Disclaimer You are responsible for reading, understanding and agreeing to the National Law Review's (NLR’s) and the National Law Forum LLC's Terms of Use and Privacy Policy before using the National Law Review website. The National Law Review is a free to use, no-log in database of legal and business articles. The content and links on www.NatLawReview.com are intended for general information purposes only.
Proposed Amendments Schedule 13D – Part One | JD Supra
In February 2022, the Security and Exchange Commission (the “SEC”) proposed an amendment (the “Amendment”) to Schedules 13D and 13G of the Securities Exchange Act of 1934, to modernize its reporting rules and ultimately to speed up the rate at which information is made available to the public. As of this post, rule changes have not been adopted, but the SEC’s stated dated for final action, April 2023, is fast approaching.
Proposed Amendments Schedule 13D - Part Two | JD Supra
As noted in our related blog post, the Security and Exchange Commission (the “SEC”) has proposed amendments (the “Amendment”) to Schedules 13D and 13G of the Securities Exchange Act of 1934, to modernize its reporting rules and improve the speed and substance of the information made available to the public. As of this post, rule changes have not yet been adopted, but the SEC’s stated dated for final action, April 2023, is fast approaching.
Helping your family (even a little) is a violation of the Advisers Act? | JD Supra
Is an “Ask” a Violation of the Advisers Act? Yes, it can be a violation to “put in a good word” for one of your family members. On January 5, 2023, the Securities and Exchange Commission (the SEC) entered into an Offer of Settlement (the Settlement) involving a former portfolio manager of a lending fund (the portfolio manager) at a well-known investment adviser (the Firm) because the portfolio manager caused a portfolio company to give a family member an audition. See here.
Helping your family (even a little) is a violation of the Advisers Act?
Wednesday, January 11, 2023 Is an “Ask” a Violation of the Advisers Act? Yes, it can be a violation to “put in a good word” for one of your family members. On January 5, 2023, the Securities and Exchange Commission (the SEC) entered into an Offer of Settlement (the Settlement) involving a former portfolio manager of a lending fund (the portfolio manager) at a well-known investment adviser (the Firm) because the portfolio manager caused a portfolio company to give a family member an audition.
An Introduction to the EU Sustainable Financial Disclosure Regime and the Draft EU Corporate Sustainability Due Diligence Directive | JD Supra
SFDR and Asset Allocators. The European Green Deal declared climate change and environmental degradation as existential threats to Europe and the world. The European Union (EU) has set out to mobilize private financial capital flows to green investments under its 2018 Sustainable Finance Action Plan.
An Introduction to the EU Sustainable Financial Disclosure Regime and the Draft EU Corporate Sustainability Due Diligence Directive
SFDR and Asset Allocators. The European Green Deal declared climate change and environmental degradation as existential threats to Europe and the world. The European Union (EU) has set out to mobilize private financial capital flows to green investments under its 2018 Sustainable Finance Action Plan.
The SEC Signals it is Ready to Enforce the New Marketing Rules | JD Supra
On September 19, 2022, the Securities and Exchange Commission (the "SEC") increased its pressure on private funds and their need to get into full compliance with the new Marketing Rule (Rule 206(4)-1) within the next month and a half. The SEC originally published the new rule in March 2021 with a compliance date of November 4, 2022 to modernize and replace a patchwork or old rules and no-action letters that have been in place for over 60 years.
The SEC Signals it is Ready to Enforce the New Marketing Rules
Tuesday, September 27, 2022 On September 19, 2022, the Securities and Exchange Commission (the "SEC") increased its pressure on private funds and their need to get into full compliance with the new Marketing Rule (Rule 206(4)-1) within the next month and a half. The SEC originally published the new rule in March 2021 with a compliance date of November 4, 2022 to modernize and replace a patchwork or old rules and no-action letters that have been in place for over 60 years.
The Game Is In The Name Of The Game−and The Name Of The Game Is ESG: SEC Proposes New Fund Rules To Further Combat
Continuing its focus on ESG practices within the fund industry, the Securities and Exchange Commission released proposed rules on May 25, 2022, that are intended to allow investors to readily discern whether a fund is focused on an ESG strategy and, if so focused, what the fund's goals are and how it is progressing toward such goals.
The Fifth Circuit Strikes a Blow to the Constitutionality of SEC Administrative Proceedings | JD Supra
On Wednesday, in a 2-1 decision, a three-judge panel of the U.S. Court of Appeals for the Fifth Circuit ruled in Jarkesy v. SEC that proceedings before an SEC administrative law judge were unconstitutional. Notably, the circuit court found the underlying proceedings unconstitutional primarily due to the lack of a jury trial when the SEC is seeking civil penalties in a fraud action.
The Fifth Circuit Strikes A Blow To The Constitutionality Of SEC Administrative Proceedings
On Wednesday, in a 2-1 decision, a three-judge panel of the U.S. Court of Appeals for the Fifth Circuit ruled in Jarkesy v. SEC that proceedings before an SEC administrative law judge were unconstitutional. Notably, the circuit court found the underlying proceedings unconstitutional primarily due to the lack of a jury trial when the SEC is seeking civil penalties in a fraud action.
Observations from Examinations of Private Fund Advisers | JD Supra Original
On June 23, 2020, the U.S. Securities and Exchange Commission (SEC) Division of Examinations (EXAMS) issued a risk alert based on 5 years of examinations of registered investment advisers that manage private equity funds or hedge funds (collectively, “private fund advisers”).1 On January 27, 2022, the EXAMS staff issued a follow up report detailing additional compliance issue observations: (A) failure to act consistently with disclosures; (B) use of misleading disclosures regarding...
Observations from Examinations of Private Fund Advisers
Wednesday, February 2, 2022 On June 23, 2020, the U.S. Securities and Exchange Commission (SEC) Division of Examinations (EXAMS) issued a risk alert based on 5 years of examinations of registered investment advisers that manage private equity funds or hedge funds (collectively “private fund advisers”).1 On January 27, 2022, the EXAMS staff issued a follow up report detailing additional compliance issue observations: (A) failure to act consistently with disclosures; (B) use of misleading...
Private Equity And Hedge Funds Should Expect More SEC Scrutiny Ahead
United States: Private Equity And Hedge Funds Should Expect More SEC Scrutiny Ahead 19 November 2021 by Stuart E. Fross , Michelle Nunez and Leslie A. Pinney Foley & Lardner Your LinkedIn Connections with the authors To print this article, all you need is to be registered or login on Mondaq.com. Last week, SEC Chair Gary Gensler gave the keynote speech for the 2021 Institutional Limited Partners Association's virtual summit.
Private Equity and Hedge Funds Should Expect More SEC Scrutiny Ahead | JD Supra
Last week, SEC Chair Gary Gensler gave the keynote speech for the 2021 Institutional Limited Partners Association’s virtual summit. Gensler focused his remarks exclusively on private funds and detailed his view that private equity and hedge funds need more scrutiny and regulation.
Investment Adviser To Mutual Fund Cited For Undisclosed Conflicts
United States: Investment Adviser To Mutual Fund Cited For Undisclosed Conflicts 08 November 2021 Foley & Lardner Your LinkedIn Connections with the authors To print this article, all you need is to be registered or login on Mondaq.com. As proof that a little disclosure can go a long way, the SEC, on May 10, 2021, announced a settlement with an investment adviser to a registered investment company that was sanctioned for undisclosed conflicts of interest.
SEC Staff Statement On Registered Funds Investing In Bitcoin Futures
United States: SEC Staff Statement On Registered Funds Investing In Bitcoin Futures 08 November 2021 Foley & Lardner Your LinkedIn Connections with the authors To print this article, all you need is to be registered or login on Mondaq.com. On May 11, the SEC Staff issued a statement to investors, encouraging them to be cautious of mutual funds that invest in Bitcoin futures.
OCIE Adds ESG/SRI To Routine Adviser Exam Requests
United States: OCIE Adds ESG/SRI To Routine Adviser Exam Requests 05 November 2021 Foley & Lardner Your LinkedIn Connections with the authors To print this article, all you need is to be registered or login on Mondaq.com. In a sign of the times, the SEC's Office of Compliance Inspections and Examinations is now including document requests relating to ESG, SRI, Impact, responsible, sustainable, green, ethical, impact or good governance investments recommended to advisory clients.
Lest We Forget, The SEC Cares About Private Equity
United States: Lest We Forget, The SEC Cares About Private Equity 04 November 2021 by Margaret G. Nelson , Thomas J. Krysa , Stuart Fross , Peter Fetzer and Stephen M. Meli Foley & Lardner Your LinkedIn Connections with the authors To print this article, all you need is to be registered or login on Mondaq.com.
SEC Brings Insider Trading Out Of The Shadows - Corporate/Commercial Law - United States
United States: SEC Brings Insider Trading Out Of The Shadows 04 November 2021 by Stuart E. Fross , Brooke Clarkson and Thomas J. Krysa Foley & Lardner Your LinkedIn Connections with the authors To print this article, all you need is to be registered or login on Mondaq.com. On August 17, 2021, the Securities and Exchange Commission (SEC) filed a litigated enforcement action in federal court in San Francisco, California alleging insider trading against Matthew Panuwat.
Scalping As Fraud But On Who?
United States: Scalping As Fraud But On Who? 04 November 2021 Foley & Lardner Your LinkedIn Connections with the authors To print this article, all you need is to be registered or login on Mondaq.com. The past has a way of repeating itself. In 1909, the New York Supreme Court declined to enforce a contract to manipulate stock prices (which was successful), with payments due to a publisher of an investment newsletter (Ridgely) and its co-conspirator (Keene) held to be unenforceable immoral profits.
Scalping as Fraud But On Who? | JD Supra
The past has a way of repeating itself. In 1909, the New York Supreme Court declined to enforce a contract to manipulate stock prices (which was successful), with payments due to a publisher of an investment newsletter (Ridgely) and its co-conspirator (Keene) held to be unenforceable immoral profits. Ridgely v. Keene, 134 App. Div. 647, 119 N. Y. Supp. 451 (1909), cited in SEC vs. Capital Gains Research Bureau, 375 U.S. 180 (1963).
Lest We Forget, the SEC Cares About Private Equity | JD Supra
During last week’s testimony before the Senate Committee on Banking, Housing, and Urban Affairs, the questioning of SEC Chair Gary Gensler focused on the expected topics of cryptocurrency regulation, ESG disclosures, and gamification. But Gensler’s written testimony circulated beforehand reminded the marketplace that private funds, including private equity, will continue to be a focal point.
SEC Brings Insider Trading Out of the Shadows | JD Supra
On August 17, 2021, the Securities and Exchange Commission (SEC) filed a litigated enforcement action in federal court in San Francisco, California alleging insider trading against Matthew Panuwat. Of note, the SEC action alleges a so-called “shadow trading” theory of insider trading. Typically, insider trading cases involve trading in company securities that are the subject of the material nonpublic information (MNPI) in question, such as trading in the securities of an acquisition target.
SEC Unforgiving of Dual Registrant’s Undisclosed Program to Help Transition New Reps | JD Supra
When representatives change firms, they often receive forgivable loans from the new firm to offset lost compensation during transition of their practices. These transition loans typically are linked to working for the new firm for a period of time and/or hitting production levels.
Ensure Disclosure Controls and Procedures Address Cybersecurity | JD Supra
On June 15, 2021, the Securities and Exchange Commission (SEC) announced settled charges against real estate settlement services company First American Financial Corporation for disclosure controls and procedures violations related to a cybersecurity vulnerability that exposed sensitive customer information. The SEC’s order charges First American with violating Rule 13a-15(a) of the Securities Exchange Act of 1934.
SEC Staff Statement on Registered Funds Investing in Bitcoin Futures | JD Supra
On May 11, the SEC Staff issued a statement to investors, encouraging them to be cautious of mutual funds that invest in Bitcoin futures. The Staff also took the opportunity to note that the Division of Economic and Risk Analysis will closely monitor registered funds’ use of Bitcoin futures.
OCIE Adds ESG/SRI to Routine Adviser Exam Requests | JD Supra
In a sign of the times, the SEC’s Office of Compliance Inspections and Examinations is now including document requests relating to ESG, SRI, Impact, responsible, sustainable, green, ethical, impact or good governance investments recommended to advisory clients. A review of OCIE’s most recent document request suggests that advisers should take a moment to revisit their preservation of all due diligence materials, including meeting notes, related to ESG investments.
ESG/SRI Added to Routine Adviser Exam Requests by OCIE
Legal Disclaimer You are responsible for reading, understanding and agreeing to the National Law Review's (NLR’s) and the National Law Forum LLC's Terms of Use and Privacy Policy before using the National Law Review website. The National Law Review is a free to use, no-log in database of legal and business articles. The content and links on www.NatLawReview.com are intended for general information purposes only.
Investment Adviser to Mutual Fund Cited for Undisclosed Conflicts
Legal Disclaimer You are responsible for reading, understanding and agreeing to the National Law Review's (NLR’s) and the National Law Forum LLC's Terms of Use and Privacy Policy before using the National Law Review website. The National Law Review is a free to use, no-log in database of legal and business articles. The content and links on www.NatLawReview.com are intended for general information purposes only.
SEC Commissioner: What Do LIBOR Transition and ESG/SFDR Have In Common? – Each Might Make You a Werewolf! | JD Supra
SEC Commissioner Hester Peirce suggested in recent remarks before the ISDA Trading Forum (April 28, 2021) that LIBOR came to mind when reading a horror story involving a werewolf. That seems about right, as both are very hairy, and can have a nasty bite. Speaking of bite: recall that OCIE has LIBOR preparedness on its 2020 exam priorities.
Investment Adviser to Mutual Fund Cited for Undisclosed Conflicts | JD Supra
As proof that a little disclosure can go a long way, the SEC, on May 10, 2021, announced a settlement with an investment adviser to a registered investment company that was sanctioned for undisclosed conflicts of interest.
Is the USA on a Path To Mandatory Climate Change Disclosure? | JD Supra
On March 15, the SEC announced a 90 day consultation period on mandatory climate change disclosure. Acting Chair Lee cited to the December 2020 work of the ESG Sub-Committee of the Asset Management Advisory Committee which in turn endorsed the development of a taxonomy for disclosure by the Investment Company Institute. Chair Lee’s comments initially focused on Regulation S-K and S-X, while soliciting public comment, there is a focus on asset managers, potentially with a private equity/debt focus.
Beware the “ESGs of March” as ESG Regulatory Change Is Afoot | JD Supra
Three recent developments in relation to ESG related disclosures are of note: (1) on March 10th, the US Department of Labor announced it would not enforce its own rules related to ESG investing, (2) on the same day the EU’s mandatory sustainability risk disclosure went into effect, and (3) the SEC announced an enforcement task force to hunt down ESG related misconduct on March 4th.
SEC Examination Risk Alert Signals Focus on Digital Asset Securities | JD Supra
On February 26, 2021, the SEC’s Division of Examinations issued a Risk Alert signaling an exam focus this year on activities of investment advisers, broker-dealers, exchanges, and transfer agents related to Digital Asset Securities, defined as assets distributed and/or transferred using distributed ledger or blockchain technology.
SEC Signals Increased Focus on Climate-Related Risk Disclosures | JD Supra
On February 24, 2021, Acting Chair of the Securities and Exchange Commission Allison Herren Lee released a public statement directing the Division of Corporation Finance to enhance its focus on climate-related risk disclosures in public filings. CorpFin staff is expected to evaluate risk disclosures against the 2010 guidance related to climate change matters, and to engage with companies to understand how the market is managing climate-related risks.
Foley Regulatory Reminder: Electronic Delivery of Shareholder Reports under Rule 30e-3 of Investment Company Act | JD Supra
Beginning January 1, 2021, registered management companies and certain registered unit investment trusts that have complied with the required transition period disclosures are now able to use electronic delivery to transmit shareholder reports. Why We are Sending this Reminder To remind registered management companies and unit investment trusts of the steps required to comply with the use of electronic delivery of shareholder reports.
Congress Passes NDAA Legislation Extending SEC’s Disgorgement Powers | JD Supra
On January 1, 2021, the U.S. Congress voted to override a presidential veto of the National Defense Authorization Act (NDAA)1, the annual military spending bill. Tucked away in the 1,400-page legislation are provisions granting the Securities and Exchange Commission (SEC) statutory authority to pursue disgorgement in federal court actions and extending the statute of limitations for the SEC to recover disgorgement from five to 10 years for scienter-based claims.
Division of Examinations Issues Risk Alert on Securities Investment that Finance Communist Chinese Military Companies | JD Supra
On January 6, 2021, the Division of Examinations (“Division”) issued a Risk Alert to notify investment advisers, broker-dealers, and other market participants of a recent action relating to investments in securities associated with Communist Chinese military companies, as well as investors transacting in such securities.
SEC Proposes Amendments to Rule 144 and Form 144 | JD Supra
On December 22, 2020, the Securities and Exchange Commission voted to propose an amendment to Rule 144 under the Securities Act of 1933 to revise the holding period determination for securities acquired upon the conversion or exchange of certain "market-adjustable securities." The proposed amendment is intended to reduce the risk of unregistered distributions in connection with sales of those securities.
SEC Adopts Modernized Marketing Rule for Investment Advisers | JD Supra
On December 22, 2020, the Securities and Exchange Commission announced it had finalized reforms under the Investment Advisers Act to modernize rules that govern investment adviser advertisements and payments to solicitors. The amendments create a single rule that replaces the current advertising and cash solicitation rules. The final rule is designed to comprehensively and efficiently regulate investment advisers’ marketing communications.
5 Takeaways Regarding OCIE’s Focus on RIAs’ Handling of “Alt Data” | JD Supra
The Securities and Exchange Commission’s Office of Compliance Inspections and Examinations (“OCIE”) highlighted alternative data, or “alt data,” as a top examination priority.1 AIMA held a webinar on November 17, 2020, for investment managers on OCIE’s use of alt data, entitled Alternative Data and OCIE: How, What and Why You Should Prepare Ahead of Your Next SEC Exam, led by Senior Advisor of Promontory Financial Group Jane Jarcho, Director of Promontory Financial Group Sarah Curran,...
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