Thomas Devaney

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First FCPA Case Against Hedge Fund

On September 29, 2016, the Securities and Exchange Commission (the “SEC”) announced that Och-Ziff Capital Management Group (“Och-Ziff”) agreed to pay nearly $200 million to the SEC to settle civil charges of violating the Foreign Corrupt Practices Act (“FCPA”).  Also, Och-Ziff’s Chief Executive Officer, Daniel Och, agreed to pay nearly $2.2 million to settle related charges.… Continue Reading

The Benefit of the Doubt: SEC Scores an Insider Trading Win Despite Newman’s Personal Benefit Requirement

On February 29, 2016, in Securities and Exchange Commission v. Payton et al, a jury found two stockbrokers liable for trading on confidential tips about an acquisition being made by IBM despite the ruling made by the Second Circuit Court of Appeals in United States v. Newman[1] in December 2014.… Continue Reading

SEC Releases 2016 Examination Priorities

On January 11, 2016 the Office of Compliance Inspections and Examinations (the “OCIE”) for the Securities and Exchange Commission (the “SEC”) announced its key areas of focus with respect to examinations in 2016. Like last year, the OCIE’s priorities are organized into three categories; (i) risks facing retail investors, (ii) assessing issues related to market-wide … Continue Reading

SEC Issues a Risk Alert on the Current State of Outside Compliance Consultants

On November 9, 2015, the SEC’s Office of Compliance Inspections and Examinations issued a Risk Alert, noting that some of the outside CCOs that were examined were not sufficiently competent, knowledgeable of the business of the company or the federal securities laws or empowered with full responsibility, resources and authority to develop and enforce appropriate … Continue Reading

SEC Charges Investment Adviser for Failure to Disclose Acceleration of Monitoring Fees and Discounts on Legal Fees

On October 7, 2015, the Securities and Exchange Commission (the “SEC”) announced that three private equity fund advisers with The Blackstone Group (“Blackstone”) have agreed to pay approximately $39 million to settle charges that the advisers failed to fully inform investors about the benefits those advisers obtained from (i) accelerated monitoring fees and (ii) discounts … Continue Reading

SEC Co-Chief of Division of Enforcement’s Asset Management Unit Identifies 2015 Exam Priorities for Hedge and Private Equity Funds

On November 18, 2014, Julie M. Riewe, Co-Chief of the Division of Enforcement’s Asset Management Unit of the Securities and Exchange Commission (the “SEC”), spoke at a Practicing Law Institute seminar and identified 2015 SEC examination priorities for investment managers of private funds.  Ms. Riewe identified three themes on which the SEC will focus in … Continue Reading

SEC Releases 2015 Examination Priorities

On January 13, 2015, the Office of Compliance Inspections and Examinations (“OCIE”) of the Securities and Exchange Commission (the “SEC”) released its 2015 examination priorities.  The SEC identified three thematic issues:  (i) matters relating to retail investors and investors saving for retirement, (ii) issues related to market-wide risks and (iii) analysis of data to identify … Continue Reading

Second Circuit Affirms Tippee Liability

On December 10, 2014, the Second Circuit Court of Appeals rendered a decision[1] regarding an insider trading case that affirmed the elements to prove tippee liability.  The Second Circuit was reviewing a district court’s conviction of Todd Newman, a portfolio manager at Diamondback Capital Management, LLC, and Anthony Chiasson, a portfolio manager at Level Global … Continue Reading

Staying Above The Political Fray – The RIA Political Contribution Rule

It is entirely understandable if after the recent hotly contested “mid-term” elections the general public would like to put political campaigns behind them– at least for the few months before the hype around the 2016 U.S. Presidential elections kicks into gear.  For many folks in the U.S. financial services industry, however, political campaigns have to … Continue Reading

Compliance Officers’ Liability

Andrew Ceresney, the Director of the Division of Enforcement of the SEC, assured compliance officers that compliance officers would not be exposed to liability when compliance officers engage and remediate problems at investment management firms in a speech given in May 2014.  Mr. Ceresney reiterated that compliance personnel do not become supervisors solely because they provide … Continue Reading

Cherry-Picking & Soft Dollars

In a decision issued on August 5, 2014 in an administrative proceeding (the “Decision”), J.S. Oliver Capital Management, L.P. and Ian O. Mausner were found to have willfully violated the antifraud provisions of the Securities Act of 1933, Securities Exchange Act of 1934 (the “Exchange Act”), and the Investment Advisers Act of 1940 by “cherry-picking” … Continue Reading

Current Trends and Risks in the Private Equity Industry

In a speech last month, Andrew Bowden, Director of the Office of Compliance Inspections and Examinations (“OCIE”) at the U.S. Securities and Exchange Commission (the “SEC”), generated some controversy within the private equity industry.  (A weblink to a copy of the speech can be found here.)  Continued discussion of the remarks has some private equity … Continue Reading

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