Author Archives: Hedge Fund Lawyer

Hedge Fund Strategy – Energy Focused Hedge Funds

Leave a reply

We have previously provided an overview of hedge fund trading strategies.  While we mentioned the major trading strategies, we did not mention some of the more niche trading strategies like energy focused hedge funds.  Energy focused hedge funds can utilize a number of different trading strategies from investing only in energy related companies to investing only in energy commodities (commodity pools). Like many of the different strategies, the structure of energy hedge funds will depend on a number of factors including the instruments traded and the expected lifespan of the investments.  Additionally, if the energy hedge fund does trade in commodities, the manager may need to be registered as a CPO.  Continue reading →

Another CFTC CPO Fraud Notice

Leave a reply

Below is a CFTC notice regarding another fraudulent commodity futures manager out of California.  The manager, who was apparently registered as a CTA, engaged in a variety of frauds on his clients and was also not properly registered as a commodity pool operator.  Investors are again urged to engage in proper hedge fund due diligence before investing in any hedge fund, including hedge funds which trade commodity futures. Continue reading →

Hedge Fund Performance – Performance Better than Expected

Leave a reply

A recent study by PerTrac reveals that not all hedge funds are having terrible performance returns in this volatile market environment.  The study also finds other interesting information including (i) many funds use little leverage and (ii) almost 50% of funds allow monthly redemptions (however the study does not mention the amount of funds which have used “gates” to limit redemptions). Other related hedge fund articles on Hedge Fund Law Blog include:

Continue reading →

California Investment Advisors Renewal Notice

2 Replies

I received this notice today from the California Department of Corporations.  All California registered Investment Advisors should take note that IARD renewal fees are due by next Friday, December 12.  If you are registered and need help with the renewal process, please contact us.  Continue reading →

Investment Advisor Barred From IA Industry For Matching Trade Fraud

Leave a reply

Hedge fund managers should not match trades between commonly managed accounts in thinly traded (or illiquid) securities as this may pose potential problems under the Investment Advisors Act of 1940.  This holds true whether the hedge fund manager is registered or unregistered.  As the release below shows, the manager may be subject to fines and/or other penalties for such trading.  If a hedge fund manager does wish to engage in such trading, he should discuss this option with a hedge fund attorney.  Please contact us if you have any questions.  Continue reading →

Fraudulent Commodity Pool Operator Issued Injunction

Leave a reply

A commodity pool operator is issued an injunction for fraudulent behavior.  In classic fashion, this fraudster touted performance results which were grossly inaccurate.  The scheme ended earlier this year and investors lost almost $6 million dollars.  As we’ve noted before, hedge fund investors (including those investors in commodity and futures hedge funds) need to make sure to complete due diligence on the hedge fund and hedge fund manager.  The release below details the events and injunction.  Continue reading →

Open Letter to CEOs of SEC-Registered Firms (SEC Release)

1 Reply

Open Letter to CEOs of SEC-Registered Firms
December 2, 2008

Dear CEO of SEC-Registered Firm:

During this time of financial and market turmoil, the Office of Compliance Inspections and Examinations of the Securities and Exchange Commission reminds leaders of SEC-registered firms, including broker-dealers, investment advisers, investment companies and transfer agents, of the critical role played by your firm’s compliance programs in helping to meet your obligations under the securities laws. Your firm’s compliance function is critical to assure that your operations comply with the law and rules for industry participation and to ensure that the interests of your customers, clients and shareholders are protected. Moreover, compliance is a vital control function that helps to protect the firm from conduct that could negatively impact the firm’s business and its reputation. Continue reading →

SEC Staff Reminds CEOs Of Registered Firms of Importance of Compliance Programs (SEC Release)

Leave a reply

SEC Staff Reminds CEOs Of Registered Firms of Importance of Compliance Programs
FOR IMMEDIATE RELEASE
2008-283

Washington, D.C., Dec. 2, 2008 — The Securities and Exchange Commission’s Office of Compliance Inspections and Examinations today issued an open letter to chief executives of SEC-registered firms, including broker-dealers, investment advisers, investment companies and transfer agents, to remind them of the critical role played by their firms’ compliance programs in assuring that their operations comply with the law and rules for industry participation and to ensure that the interests of customers or clients are protected. Continue reading →

Hedge Fund Accounting Firm Named Tops in 2008 (Press Release)

Leave a reply

Rothstein Kass Rated Top Accounting Firm in 2008 Hedge Fund Service Providers Survey by Alpha Magazine

NEW YORK, Dec 01, 2008 /PRNewswire via COMTEX/ — CPA firm Rothstein Kass rated first among accounting firms in the 2008 Alpha Awards(TM), an annual ranking of hedge fund service providers sponsored by Institutional Investor’s Alpha Magazine. Results were based on voting by more than 1,000 hedge fund firms with aggregate assets in excess of $1.5 trillion. Researchers asked participants to rate the quality of service received during the 12 month period ended March 31, 2008. Rothstein Kass finished first overall for client service and also topped the list of “small firms’ favorites,” and “big firms’ favorites.” The firm was also the top firm in the “audit,” “regulatory & compliance” and “hedge fund expertise” categories. Continue reading →

Hedge Fund Consultant

3 Replies

Hedge fund consultants are individuals or firms that provide a variety of different services to hedge funds and hedge fund managers.  These individuals or firms typically have significant industry expertise and a strong network within the investment management industry.  These groups also tend to have a strong working knowledge of the mechanics of the hedge fund investment process.  Accordingly, managers will utilize hedge fund consultants for a variety of reasons in order to get the most out of their hedge fund. Continue reading →