SEC Considers Change to Accredited Investor Standard

Simon Riveles SEC

Under the Dodd-Frank Act of 2010, the Securities and Exchange Commission (the “SEC”) is required to examine the definition of “accredited investor” every four years to determine if it should be modified.  Under the current standard, a natural person qualifies as an “accredited investor” for purposes of participating in a Rule 506 offering if he or she has earned at least $200,000 in annual income in each …

SEC issues Investor Alert: 10 Red Flags that a Private Placement May be Fraudulent or a Scam

Simon Riveles SEC

August 2014 Earlier this month, the Securities & Exchange Commission’s (the “SEC” or “Commission”) Office of Investor Education and Advocacy released a list of ten red flags investor’s should be wary of when evaluating a private offering. Under the securities law, sales of securities in a fund, a company or other issuer that have not been registered with the SEC are not subject to the …

Simon Riveles Appointed Chairman of the Hedge Fund Association’s Regulatory & Government Advisory Board

Simon Riveles The Hedge Fund Association

August 26. 2014 The Hedge Fund Association (“HFA”), a global nonprofit trade and nonpartisan lobbying organization, announced today the appointment of Simon Riveles of Riveles Law Group, as Chairman of its Regulatory & Government Advisory Board. The Board educates lawmakers and regulators about hedge funds, and advocates on behalf of its members and their interests. More information on the HFA can be found here: https://www.thehfa.org/ …

SEC Issues New Guidelines on Social Media Use

Simon Riveles Investment Advisers, SEC, Social Media

By Masha  Goncharova and Simon Riveles In response to growing interest among investment advisers to communicate to clients through social media, the SEC staff has been establishing new informal guidelines on proper social media use. New parameters set forth this spring limit the scope of client testimonials and now allow advisers to provide required cautionary legends via hyperlinks, making it easier to communicate on platforms …

Simon Riveles Panelist at the Infovest21 Seminar Entitled “Regulatory Update for Hedge Funds and Funds of Funds”

Simon Riveles Hedge Funds, SEC

  On June 3, 2014, Infovest21, an information provider to hedge fund investors, managers, funds of funds, and service providers, sponsored a seminar at the Cornell Club in New York entitled “Regulatory Update for Hedge Funds and Funds of Funds.” The seminar featured an expert panel comprised of Simon Riveles of Riveles Law Group, Jillian Timmermans of compliance consulting firm, Cordium, and Gene DaCosta of …

SEC Launches New Group Focused on Private Equity & Hedge Funds

Simon Riveles Hedge Funds, Private Equity Fund, SEC

By Simon Riveles and Simon Cooke According to a report by Reuters, the U.S. Securities and Exchange Commission (“SEC”) has formed a group dedicated to examine private equity funds and hedge funds (the “Group”). The Group will focus on how these funds value their assets, disclose their fees and communicate with investors. The Group is co-chaired by Igor Rozenblit and Marc Wyatt. Mr. Rozenblit, both …

Private Funds, the Cayman Islands IGA and FACTA

Simon Riveles Cayman IGA, FACTA, Uncategorized

By Simon Riveles and Simon M. Cooke. On November 29, 2013, the Cayman Islands signed a FACTA Model 1 intergovernmental agreement (“IGA”) with the United States. The IGA ensures that financial institutions located in the Caymans, whose investors include ‘Specified U.S. Persons’ (defined below), will be able to largely bypass the burdensome FACTA compliance obligations that are applicable to financial institutions located in Model 2 …

SEC issues No-Action Letter providing M&A Brokers with relief from broker-dealer registration

Simon Riveles Broker Dealer Exemption, Broker Dealer Registration, M&A Broker, Private Equity Fund

By Simon Riveles and Simon M. Cooke On January 31, 2014, the SEC’s Division of Trading and Markets (the “SEC”) issued a No-Action Letter allowing an M&A Broker (defined below), to effect securities’ transactions in connection with the transfer of ownership of a privately held company (also defined below), subject to certain conditions, without registering as a broker-dealer pursuant to Section 15(b) of the Securities …

SEC Moves to Update Regulation A

Simon Riveles Jobs Act, Regulation A+, SEC

By Kathryn Dachille and Simon Riveles December 18, 2013, the SEC voted to propose amendments to Regulation A that would allow  offerings of up to $50 million in any twelve month period (“Tier 2 offerings”), as mandated by Title IV of the JOBS Act (so called Regulation A+”). While Tier 2 offerings would be subject to significant additional requirements, such as the provision of audited …

SEC Issues New Guidance on Bad Actor Rules

Simon Riveles 506 Disqualification, Bad Actor

By Simon Riveles and Simon Cooke On July 10, 2013, the U.S. Securities and Exchange Commission (“SEC”) adopted amendments to Rule 506 of the Securities Act of 1933 to disqualify securities’ offerings relying on the Rule 506 exemption that involve certain “bad actors”. These amendments came into effect on September 23, 2013. Please refer to our earlier blog for background on these amendments. On December …

Bitcoin and U.S. Regulation

Simon Riveles Bitcoin, FINCEN, Uncategorized

By Simon Riveles and Simon Cooke Bitcoin faces an uncertain regulatory future in the U.S. This uncertainty has led to the U.K.’s newest and most developed bitcoin exchange, Coinfloor, not accepting U.S. customers, at least initially. Bitcoin is a ‘peer to peer’ virtual currency created by a computer generated math based protocol. Bitcoin is an extremely risky and volatile investment with bitcoin’s value fluctuating by …

Simon Riveles a Panelist at the Hedge Fund Association’s Student Symposium at Seton Hall on November 20th

Simon Riveles Uncategorized

On November 20, 2013, the Hedge Fund Association (“HFA”), an international non-for-profit organization made up of hedge funds, funds of hedge funds, family offices, high net worth individuals, and service providers, is sponsoring the HFA Inaugural Student Symposium at Seton Hall entitled, How to Find Your Fortune Without Losing Your Soul. The Symposium was a unique opportunity for Seton Hall students interested in learning more …

New Derivative Position Limit Rule

Simon Riveles CFTC, Futures, Position Limit

Under the Dodd–Frank Wall Street Reform and Consumer Protection Act (commonly referred to as “Dodd-Frank”), Congress required the Commodities Futures Trading Commission (“CFTC”) to impose limits in speculative positions in physical commodity futures and options contracts and economically equivalent swaps. On November 5, 2013, the CFTC in a 3-1 vote approved a new rule (the “Rule”) that establishes position limits in 28 physical commodity futures …

Proposed Crowdfunding Rules Available for Public Comment

Simon Riveles Accredited Investor, Advertising, Crowdfunding, SEC, Uncategorized

On October 23, 2013, the SEC released a set of proposed rules under the JOBS Act (the “Act”), which would permit emerging growth companies (EGC’s) to offer and sell securities through crowdfunding platforms.  In their current form, the proposed rules closely resemble the original parameters outlined in Section III of the Act, the section from which the crowdfunding provision was born.  The rules will be …

SEC Monitoring the Use and Market Impact of General Solicitation

Simon Riveles General Solicitation, SEC, Uncategorized

At the Managed Funds Association Outlook 2013 Conference, held on October 18, 2013, SEC Chair Mary Jo White delivered a speech emphasizing the importance of transparency in the hedge fund industry.  Chair White highlighted that the JOBS Act, which allows private funds to participate in the general solicitation, increases the responsibility of private funds to be open and honest with potential clients and regulators.  Chair …

ERISA and Hedge Funds

Simon Riveles ERISA, Hedge Funds, IRS, Uncategorized

What is ERISA? ERISA is the Employee Retirement Income Security Act of 1974, which governs, among other things, the investment of certain benefit plans into hedge funds. The significance of ERISA for hedge funds is that if more than 25% of a hedge fund’s equity interests are those of certain “benefit plan investors,” all of the hedge fund’s assets will be considered “plan assets” under …

CFTC and Swaps: What You Should Know

Simon Riveles CFTC, Hedge Funds, Swaps

Under the Commodity Exchange Act (“CEA”), a person who qualifies as a “swap dealer” or “major swap participant” is required to register with the Commodity Futures Trading Commission (“CFTC”) and comply with the Dodd-Frank Wall Street Reform and Consumer Protection Act’s regulatory regime governing swaps, which generally requires, among other things: Mandatory clearing of certain designated derivatives through a “derivatives clearing organization” (“DCO”) Mandatory execution …

The “Bad Actor” Amendments: Private Issuer Compliance with Rule 506

Simon Riveles Bad Actor, General Solicitation, Hedge Funds, Jobs Act, Private Fund Exemption, Private Placement, Reg D Rule 506

By Simon Riveles and Peter Tyson On July 10, 2013, the Securities and Exchange Commission (SEC) adopted amendments to Rule 506 of the Securities Act of 1933 to disqualify securities offerings relying on the Rule 506 exemption that involve certain “felons and other ‘bad actors’”.  The final amendments (the Final Rules) went into effect on September 23, 2013 (the Effective Date) and apply to all …

CPO Exemptions and General Solicitation

Simon Riveles Uncategorized

The Securities and Exchange Commission (“SEC”) recently adopted the final rules amending Rule 506 of the Securities Act of 1933, which will eliminate the prohibition on general solicitation for private funds provided fund managers only offer interests to “accredited” investors and take reasonable steps to verify each investor’s accredited status. The final rules will go into effect September 23, 2013. While many private fund managers …

IRS Launches Online System For FATCA Registration

Simon Riveles BVI, FACTA, IRS, Offshore Funds

By Peter Tyson and Simon Riveles On August 19, 2013 the Internal Revenue Service (IRS) launched a new online registration system for financial institutions needing to register with the IRS under the Foreign Account Tax Compliance Act (FATCA). FATCA, which was enacted as part of the Hiring Incentives to Restore Employment (HIRE) Act of 2010 to counter tax evasion, requires foreign financial institutions, which include …