From the monthly archives:

July 2008

CFTC Release 5527-08

July 31, 2008

Release: 5527-08
For Release: July 31, 2008
Tampa Resident Edward J. Evors Ordered to Pay $904,000 in Restitution and Civil Monetary Penalties in CFTC Action Evors Permanently Prohibited from Engaging in Commodity Trading-Related Activities
Washington, DC – The U.S. Commodity Futures Trading Commission (CFTC) announced today that it obtained $452,000 in restitution and a $452,000 civil monetary penalty [...]

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ABL and distressed debt hedge funds are hot

July 31, 2008

For the past nine to twelve months a central question from anyone I meet is: with the markets the way they currently are – how is your business? The answer, maybe surprisingly, has been great. Each month we have more and more clients; each month there are new hedge fund managers who are eager to [...]

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Thinking about Hedge Fund E&O insurance?

July 31, 2008

If so, you better be aware of any potential liabilities against your organization. In an action against a hedge fund insurance company, an insured investment adviser lost in a claim against the insurance company for $5 million in losses. The reason the investment adviser lost the claim is, centrally, because they should have revealed [...]

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SEC cracks down on lax AML implementation

July 31, 2008

Yesterday the SEC ordered E*Trade to comply with the AML rules which requires brokers to know the identity of their clients. The order found that E*Trade did not verify the identities of 65,442 secondary accountholders. While this is a major breach of the AML rules, it also shows that the SEC is continuing [...]

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CFTC Release 5525-08

July 30, 2008

Release: 5525-08
For Release: July 30, 2008
California Resident Gilbert Philip Castillo, Jr. to Pay More Than $272,000 to Resolve CFTC Anti-Fraud Action
Washington, DC – The U.S. Commodity Futures Trading Commission (CFTC) announced today that Philip Castillo, Jr. of Walnut Creek, California, will pay $92,474.60 in restitution and a $180,000 civil monetary penalty to resolve CFTC charges [...]

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SEC issues Interpretive Letter on Solicitors

July 30, 2008

Analysis to be forthcoming…
See http://www.sec.gov/divisions/investment/noaction/2008/mayerbrown072808-206.htm
The Text:
Investment Advisers Act of 1940 — Rule 206(4)-3
Mayer Brown LLP — Interpretative Letter
July 28, 2008

RESPONSE OF THE OFFICE OF CHIEF COUNSEL
DIVISION OF INVESTMENT MANAGEMENT
Our Ref. No. 20087251738
Mayer Brown LLP
File No. 132-3

This letter replaces the letter that we issued to you on July 15, 2008 (”Original Letter”).1 We are replacing the [...]

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Changing the name of a previous entity (track record portability)

July 30, 2008

Hedge fund track record portability is always a big issue. A manager will want to bring his track record with him and some people believe that the track record of a “fund” is better than the track record of a managed account. In furtherance of this, some managers may be tempted to use an [...]

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Cayman notches 10,000th hedge fund

July 29, 2008

In a press release statement from Walkers, the Cayman law firm announces that the Cayman Islands have over 10,000 registered hedge funds as of the end of June 2008. Please see release below:
Cayman Islands Sets Milestone with 10,000 Registered Funds
28-Jul-2008
Recent second quarter figures from the Cayman Islands Monetary Authority (CIMA), have confirmed the achievement [...]

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Statement by Chairman Cox refers to hedge funds

July 25, 2008

On July 24, 2008 SEC Chairman Christopher Cox testified before the Congressional Committee on Financial Services concerning the reform of the financial regulatory system.
His statement:

Given these business, accounting, and regulatory differences, imposing the existing commercial bank regulatory regime on investment banks would be a mistake. It is conceivable that Congress could create a framework for [...]

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Cox testifys to Congress: discusses hedge funds

July 24, 2008

Jul. 24, 2008
Testimony Concerning Reform of the Financial Regulatory System, Before the Committee on Financial Services, U.S. House of Representatives
Given these business, accounting, and regulatory differences, imposing the existing commercial bank regulatory regime on investment banks would be a mistake. It is conceivable that Congress could create a framework for investment banking that would [...]

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