SEC’s Madoff Failure Cited in Lawsuit Just a quick note that the New York Times has written an article about two Madoff investors who are suing the SEC for not doing its job.  It will likely be a tough case for the investors/plaintiffs to prevail upon because of the doctrine [...]

Picking a domain name for your hedge fund website Start up hedge fund managers always have the difficult task of thinking up a new, good names for their management company and hedge fund (see Naming Your Hedge Fund).  This difficulty is compounded by the fact that the desired name may [...]

Panel Discussion on State of Hedge Fund Industry Yesterday afternoon (May 6th) the Bay Area Hedge Fund Roundtable, a group of professionals within the hedge fund industry, gathered for a panel presentation entitled “Change…Critical Legal, Tax, Acounting and Regulatory Updates You Need to Know.”  The presentation was moderated by Pamela [...]

Most hedge funds will require investors to be “accredited investors.”  In general, a natural person is deemed to be an accredited investor if (1) the natural person has an individual net worth, or joint net worth with the person’s spouse, that exceeds $1 million at the time of the purchase [...]

Company Promotes Secondary Hedge Fund Trading Some hedge funds, for a number of potential reasons, are closed for further investment by outside investors.  In these cases outside investors can try to get into the funds organically or they can enter the fund through the secondary hedge fund market.  In the [...]

Hedge Fund Investors Guide Many potential hedge fund investors come to this website for information on how to invest in a hedge fund.  While there are many headlines and resources for hedge fund managers, there are fewer resources out there for hedge fund investors.  This article will provide an overview [...]

In our continuing effort to expand our hedge fund law resources on this blog, we will be posting statutes and other legal resources from each of the states.  Because each state has different laws and enforces those laws differently, hedge fund lawyers often discuss state specific hedge fund issues with [...]

We hear about the “web 2.0” and today’s San Francisco Chronicle used the term “Wall Street 2.0” which made me wonder what the hedge fund industry will look like after this mess clears itself over the next couple of months.  First, it is obvious that there is going to be [...]

We have previously discussed the difference between a 3(c)(1) hedge fund and a 3(c)(7) hedge fund. Unlike a 3(c)(1) hedge fund where investors only generally need to be accredited investors and potentially qualified clients, all investors in a 3(c)(7) hedge fund must be “qualified purchasers.” A qualified purchaser is a [...]

Summary: The CFTC ordered a hedge fund manager who operated four commodity pools to pay more than $279 mm in restitution to prior hedge fund investors as well a $20 mm civil penalty for his fraud. The manager concealed huge losses from investors by issuing false account statements which reflected [...]