On the heels on several high profile scandals, the SEC has moved quickly to address “pay-to’play” practices in the hedge fund and investment advisory arenas. Last week, the SEC adopted new Rule 206(4)-5 limiting “pay-to-play” practices for investment advisers, including hedge fund investment advisers. The new Rule effectively prohibits the adviser from receiving compensation from [...]
You may have noticed that we haven’t posted any blogs lately. That’s because we have been just overwhelmed with the sheer volume of information, particularly on the hedge fund scandal front — not to mention the regulatory front! But for this post, we wanted to keep it simple and focus on a lesser-known recent news story that brings into focus [...]
For hedge fund compliance professionals, a primary part of their job responsibility is to prevent or detect front-running. In the hedge fund context, front-running is generally defined as a manager or employee taking a position in an equity security prior to the fund, or filling an order for their own account prior to the fund’s. [...]
The holiday season is upon us! What better time for hedge fund compliance professionals to revisit their gift-giving and gift-receiving policies! The over-arching compliance issue around gifts is that they should not result in, or even give the perception of, a conflict of interest. An example of this would be excessive gift giving from a [...]
The resignation of David Aufhauser as General Counsel of UBS’s Investment Banking Division this week raises an important compliance question: who, if anyone, at UBS was reviewing his personal trading? Did UBS have a complete “circle of review” such that even the top executives doing the reviewing were themselves being reviewed? Mr. Aufhauser resigned after [...]
Many registered investment advisers of hedge funds start their annual review of compliance procedures and processes in June. But what exactly are the requirements for this review? Rule 206(4) -7 under the Advisers Act requires registered investment advisers to annually assess the “adequacy and effectiveness” of the compliance program. This review may take place once [...]
