Weavering Case Overview An August 26, 2011 judgment of the Grand Court of the Cayman Islands, Financial Services Division, held two independent directors personally liable for “wilful neglect or default” in exercising their supervisory responsibilities as directors of the Weavering Macro Fixed Income Fund Limited (the “Fund”). The two independent [...]

New Lobbyist Requirements Apply to Hedge Fund Placement Agents With the enactment of AB 1743 (effective January 1, 2011) and SB 398 (effective October 9, 2011), California has imposed new requirements on persons who market investment managers and their funds to California pension plans – that is, California Public Employees’ [...]

Examination Reveals Compliance Focus Areas NASAA, the lobbying body of the various state securities divisions, recently released a set of examination findings which describe the common compliance deficiency areas for IA firms registered with the state securities commissions.  The exams, which were completed by state administrators, showcase a number of [...]

Dodd-Frank Implementation Considerations for Private Equity and Hedge Funds On October 18th Grant Thornton LLP and Financial Women’s Association of San Francisco will be hosting a panel discussion and reception focused on regulatory issues for hedge funds and private equity funds.  Karl Cole-Frieman, a partner with Cole-Frieman & Mallon LLP, will [...]

Hedge Fund Seeder & Capital Alternative Although industry assets are at record levels, start-up and emerging hedge fund managers are finding it extremely difficult to raise capital.  The overwhelming majority of asset inflows have gone to managers with assets in excess of $5 Billion despite empirical evidence that suggests that [...]

NFA Interpretive Notice 9021 CPOs and CTAs generally must be members of the National Futures Association (“NFA”) and all NFA Member firms have certain compliance obligations.  An important compliance obligation of any firm is to know whether it will be subject to enhanced supervisory requirements.  In general, if a certain percentage [...]

FINRA “Anti-Spinning” Rule 5131 The anti-spinning provisions of FINRA Rule 5131, which addresses certain conflicts of interest in allocation of New Issues, will go into effect September 26, 2011. Although Rule 5131 only applies to FINRA members (broker-dealers), hedge funds that invest in initial public offerings will be required to [...]

Full Text of FINRA Rule 5131 The following is the full version of FINRA Rule 5131 effective as of September 26, 2011.  This rule, in conjunction with FINRA Rule 5130, governs the manner in which investors may participate in New Issues.  Specifically, Rule 5131 prevents “spinning” which is the practice [...]

SRO for Private Fund Adviser could be established, but not without challenges Over the last few weeks we have heard much talk about the potential formation of a self-regulatory organization (“SRO”) for registered investment advisers (i.e. hedge fund managers). In July the U.S. Government Accountability Office (“GAO”) released a report [...]

Compliance Requirements of the SEC Custody Rule Hedge fund managers are preparing to register as investment advisers with the SEC pursuant to the new Dodd-Frank registration requirements.  One of the issues which managers will be dealing with during that process is the hedge fund custody rule (Rule 206(4)-2 under the Investment [...]