Delaware has adopted a rule exempting “private fund advisers” from the state’s unlawful conduct provision, including the provision requiring registration as an investment adviser. Under the new rule, a private fund adviser is exempt from Delaware Securities Act unlawful conduct provisions if: (1) neither the private fund adviser nor any…
Last month at the Annual Conference of the Securities and Exchange Commission (“SEC”), the Commission revealed its enforcement statistics for 2014, including a record number of enforcement actions (755) and monetary relief obtained ($4.1 Million). The Commission also announced its current initiatives including a continued emphasis in the use of…
On February 4, 2015, the SEC issued cease and desist orders against three investment advisers that fraudulently maintained registration with the SEC by listing Wyoming as their principal place of business on their Forms ADV. These three incidences highlight Wyoming’s unusual landscape for investment advisers. In order to explain the…
Tennessee’s new “Invest Tennessee Exemption” to the state’s securities registration requirements went into effect on January 1, 2015. Like other securities exemption laws recently adopted by other states, Tennessee’s exemption allows for the intrastate offerings of certain securities that do not exceed $1 million. The law sets out the rules…
In an effort to inform investors about common fraudulent activities involving individual retirement accounts (“IRAs”), the North American Securities Administrators Association (“NASAA”) has issued an Advisory on third-party custodians of self-directed IRAs and other qualified plans. The advisory was issued to describe the roles and responsibilities a third-party custodian of…
In a speech given at The New York Times Dealbook Opportunities for Tomorrow Conference in New York at the end of 2014, SEC Chair Mary Jo White detailed an extensive plan to increase the agency’s scrutiny of asset managers. Her speech highlighted many of the important issues currently facing the…
On February 3, 2015, H.R. 686, a bill creating a registration exemption for M&A Brokers, was introduced in the House of Representatives and referred to the Committee on Financial Services. This new bill is identical to Section 401 of H.R. 37, which included other financial regulations and had passed the…
The Broker-Dealer section of the North American Securities Administrators Association (“NASAA”) recently sent out a notice of request for comment on a proposed uniform state model rule (“Model Rule”) that would exempt merger and acquisition brokers (“M&A Brokers”) from state securities registration if certain requirements were met. While NASAA’s proposed…
On October 22, 2014, Michigan took a significant step to increase investment crowdfunding opportunities for Michigan businesses by becoming the first state to establish an intrastate market where broker-dealers can sell securities of Michigan-based companies. While “crowdfunding” can have different meanings, including rewards-based fundraising campaigns on sites like Kickstarter and…
In a settlement that underscores the SEC’s increased scrutiny of crowdfunding sites and whether they are acting as broker-dealers, the SEC agreed to a settlement with Eureeca Capital SPC (“Eureeca”), on November 10, 2014, over charges alleging willful violations of Sections 5(a) and 5(c) of the Securities Act and Section…