Tag Archives: hedge fund

Professor Coffee Testimony at Senate Madoff Hearing

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Yesterday the Senate Banking Committee held a hearing on the Madoff scandal.  Those present included: Senator Christopher J. Dodd; Professor John C. Coffee, Adolf A. Berle Professor of Law, Columbia University Law School; Dr. Henry A. Backe, Orthopedic Surgeon; Ms. Lori Richards, Director, Office of Compliance Inspections and Examinations, U.S. Securities and Exchange Commission; Ms. Linda Thomsen, Director, Division of Enforcement, U.S. Securities and Exchange Commission; Mr. Stephen Luparello, Interim Chief Executive Officer, Financial Industry Regulatory Authority; and Mr. Stephen Harbeck, President and CEO, Securities Investor Protection Corporation.

We have reprinted below the testimony of John Coffee.  For other testimony, please see:

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Thomsen Testimony at Senate Madoff Hearing

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Yesterday the Senate Banking Committee held a hearing on the Madoff scandal.  Those present included: Senator Christopher J. Dodd; Professor John C. Coffee, Adolf A. Berle Professor of Law, Columbia University Law School; Dr. Henry A. Backe, Orthopedic Surgeon; Ms. Lori Richards, Director, Office of Compliance Inspections and Examinations, U.S. Securities and Exchange Commission; Ms. Linda Thomsen, Director, Division of Enforcement, U.S. Securities and Exchange Commission; Mr. Stephen Luparello, Interim Chief Executive Officer, Financial Industry Regulatory Authority; and Mr. Stephen Harbeck, President and CEO, Securities Investor Protection Corporation.

We have reprinted below the testimony of Linda Thomsen.  For other testimony, please see:

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Richards Testimony at Senate Madoff Hearing

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Yesterday the Senate Banking Committee held a hearing on the Madoff scandal.  Those present included: Senator Christopher J. Dodd; Professor John C. Coffee, Adolf A. Berle Professor of Law, Columbia University Law School; Dr. Henry A. Backe, Orthopedic Surgeon; Ms. Lori Richards, Director, Office of Compliance Inspections and Examinations, U.S. Securities and Exchange Commission; Ms. Linda Thomsen, Director, Division of Enforcement, U.S. Securities and Exchange Commission; Mr. Stephen Luparello, Interim Chief Executive Officer, Financial Industry Regulatory Authority; and Mr. Stephen Harbeck, President and CEO, Securities Investor Protection Corporation.

We have reprinted below the testimony of Lori Richards.  For other testimony, please see:

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Hedge Fund Registration Becoming More Likely

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SEC Commissioner Calls for Hedge Fund Registration in Two Recent Speeches

In two separate speeches this year SEC Commissioner Luis A. Aguilar has called for hedge fund registration.  Commissioner Aguilar, appointed to the Commission last year, asked Congress to pass legislation amending the Investment Advisors Act to give the SEC authority to regulate hedge funds or hedge fund advisors.  Aguilar believes that increased regulation will provide the SEC with more information about funds and will also give the SEC the necessary tools to identify and potentially prevent misconduct prior to investor losses.  Continue reading →

CPO Annual Report Guidance

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CFTC Release Provides Guidance on Annual Report Requirements

CFTC Rule 4.22(c) requires commodity pool operators to provide each investor in the commodity pool with certain information on an annual basis.  These Annual Reports must be provided to investors (generally in hard copy) within 90 days of the end of the CPO’s fiscal year (generally the calendar year).  These Annual Reports must also be filed with the NFA within 90 days of the end of the CPO’s fiscal year.  Because of the technical nature of the Annual Report requirement, the CFTC has released a reminder which provides information on a variety of technical aspects of the Rule.  Continue reading →

Hedge Fund Pitchbook

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Using a Pitchbook to Market Your Hedge Fund

Marketing a hedge fund is one of the more difficult parts of running and managing a fund.  Many times, managers will discuss investments into a fund through a face-to-face meeting with a potential investor.  During this meeting, a manager will utilize a “pitchbook” as the central way of conveying the most important aspects of an investment in the fund.  This article will provide an overview of the most common parts of a hedge fund pitchbook.  We have also provided a sample pitchbook below. Continue reading →

Charges for Nadel

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SEC Charges Missing Trader for Defrauding Investors at Sarasota-Based Hedge Funds

FOR IMMEDIATE RELEASE
2009-10

Washington, D.C., Jan. 21, 2009 — The Securities and Exchange Commission today charged Arthur Nadel of Sarasota, Fla., with fraud in connection with six hedge funds for which he acted as the principal investment advisor. According to the SEC’s complaint, Nadel provided false and misleading information for dissemination to investors about the funds’ historical returns and falsely overstated the value of investments in the funds by approximately $300 million. Continue reading →

What is a hedge fund? (Part 2)

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Another Hedge Fund Definition

The term “hedge fund” has been defined numerous times in various government reports and in other financial publications.  We have provided a previous Hedge Fund Definition.  The definition provided below comes from the President’s Working Group report on Hedge Fund Best Practices.

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By “hedge fund” we mean a pooled investment vehicle that generally meets most, if not all, of the following criteria:  (i) it is not marketed to the general public (i.e., it is privately offered), (ii) its investors are limited to high net worth individuals and institutions, (iii) it is not registered as an investment company under relevant laws (e.g., U.S. Investment Company Act of 1940), (iv) its assets are managed by a professional investment management firm that is compensated in part based upon investment performance of the vehicle, (v) its primary investment objective is investing in a liquid portfolio of securities and other investment assets, and (vi) it has periodic but restricted or limited investor redemption rights. (This description is based in part on the definition in the Managed Funds Association’s 2007 Sound Practices for Hedge Fund Managers.) Although hedge funds may invest in private equity and real estate, this Report is not addressed to the specific considerations of private equity or real estate funds.  We use the terms “alternative asset manager” and “manager” to refer to the entity that establishes the investment profile and strategies for the hedge fund and makes the investment decisions on its behalf.

Washington DC Hedge Fund Law

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Starting a hedge fund in the District of Columbia

In DC, things are starting to get back to normal post-election.  Hedge fund and investment managers who are located in DC, however, will generally need to be registered as investment advisors with the Department of Insurance, Securities and Banking (ISB).  I’ve reviewed the DC investment advisory rules and have found that they have the standard investment advisory definition and, generally, no exemption from the registration provisions for hedge fund managers.  This means that start up hedge fund managers with a place of business in DC will need to register as an investment advisor with the ISB.  The ISB website is fairly helpful and provides links to good information regarding registration.  I have posted one of these resources below, dealing wih the filing requirements for DC investment advisory registration.  Continue reading →

MBA Students Run Hedge Fund

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It is no secret that some of tomorrow’s brightest hedge fund managers are working with investment management and hedge fund techniques during their MBA programs.  Sometimes the work is self initiated – running incubator hedge funds outside of class.  Sometimes the work is part of a school sponsored program or class designed to give MBA students a crash course in hedge fund management.  The release below discusses a recent program by Cornell’s Johnson school which has been particularly successful.

If you are a current MBA student and are thinking about starting an incubator hedge fund, or other type of asset management business, we would be happy to discuss your current and future plans.  Continue reading →