Doug Cornelius on compliance for private equity real estate

The Yucaipa Master Manager didnt properly inform investors of all costs tied to preparing tax returns. Yucaipa resolved the case without admitting or denying the SECs allegations. Under the fund documents for the Yucaipa American Alliance private equity funds, the cost of preparing the funds tax tax returns are an expense of the funds. Yucaipa

ILPA Asks for Regulatory Changes for Private Equity

The Institutional Limited Partners Association and 35 of its member institutions sent a letter to the Securities and Exchange Commission pushing for stronger regulations on private equity advisory firms.   ILPA is asking the SEC to make 7 changes. Rescind the Heitman Capital Management No-Action Letter, issued in 2007. SEC enforcement settlements with private fund advisers

The Pay to Play Rule and Political Endorsements

Its not often that I open The Boston Globe and see a front page story about compliance with Security and Exchange Commissions Rule 206(4)-5: Patrick stays quiet as his former aide runs for governor. Jay Gonzalez was the former Secretary of Administration and Finance for the state of Massachusetts under Governor Deval Patrick. Mr. Gonzalez

Proposed Enhanced Investment Adviser Regulation

Yesterday I pointed out the fiduciary duty obligations laid out in the SECs new release. The other half of the release is a request for comment on three new proposals to enhance investment adviser regulation. Federal Licensing and Continuing Education Provision of Account Statements Financial Responsibility The SEC notes these as areas where the broker-dealer

Of the trio of regulatory releases from the Securities and Exchange Commission last week, the one targeted at registered investment advisers is a little weird. It sets out the fiduciary duty of investment advisers, sort of, and proposes some new regulations. One of the problems with the fiduciary duty is that it is not explicitly

Private Real Estate and Regulatory Assets Under Management

Its that time of the year again. Real estate fund managers registered with the Securities and Exchange Commission are working on their Form ADV filings. Im hearing a few questions about the right way to calculate Regulatory Assets Under Management. The instructions to Form ADV Part 1 Appendix B provide three steps on page 9:

While looking through the various restrictions on advertising for investment advisers, I was  struck by how they fail to address the operations of private equity funds. The Securities and Exchange Commission effectively banned advertising by investment advisers for decades. As reality came, the SEC relented, subject to strict restrictions. In this post-Dodd-Frank world with private

I run across compliance stories that make me scratch my head when I find something odd.  I just came across another that made me remember one of the quirks of registration with the Securities and Exchange Commission as an investment adviser. The SEC was after Timothy Sexton and his advisory firm, Bantry Bay Capital. Examiners showed

Increasing the Threshold for Qualified Clients and Performance Fees

The U.S. Securities and Exchange Commission proposed to increase the net worth threshold for Qualified Clients from $2 million to $2.1 million. Rule 205-3 currently requires qualified clients to have at least $1 million of assets under management with the adviser or a net worth of at least $2 million. Under the Investment Advisers Act, an

2016 is a leap year. That means there was an extra day in February. That moves the deadline for investment advisors and registered fund managers for filing Form ADV from March 31 to March 30. In other words, Form ADV is due today. Hopefully that has not caught you off guard. If it has, you

DOJs New Evaluation of Corporate Compliance Programs

Regulation S-P Privacy Notices and Safeguard Policies

Howey Test Framework for Investment Contract Analysis of Digital Assets

Pre-existing, Substantive Relationships and General Solicitation

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Compliance Building is published byDoug Cornelius, focusing on compliance and ethical issues for private equity real estate companies. Read more in

TheDodd-Franklaw brought many real estate private equity firms into the world of theInvestment Advisers Act. These are some key stories on the topic:

Yes, the SEC Wants Real Estate Fund Managers to Register

Are Real Estate Fund Managers Registered with the SEC?

Real Estate Funds and the Investment Company Act

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