SEC Cuts Back on Anti-Cherry Picking Rules

On November 7, 2008, the SEC’s Division of Investment Management issued a no-action letter to The TCW Group Inc. indicating that the division will not recommend enforcement action if wholly-owned investment advisory subsidiaries of TCW distribute marketing materials to prospective and current clients where the materials highlight certain portfolio investments and contain other analytical information, so long as TCW complies with conditions designed to prevent subjectivity and misleading cherry-picking of results.  We explain how this no-action letter may expand the range of investment-specific information that hedge fund managers may communicate to investors.

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