Apr. 20, 2017
Apr. 20, 2017
Reed Smith Adds Funds and Corporate Partners in New York and San Francisco
Failure to Consider Relevant Market Inputs When Valuing Assets May Draw SEC Enforcement Action Against Fund Managers
Valuation by private fund managers remains a focus of SEC attention for its effect on performance, the fees payable to managers and the price at which investors enter and exit a fund. As it relates to illiquid or thinly traded assets, this exercise is particularly nettlesome. In a recently settled enforcement proceeding, the SEC asserted that, in contravention of its funds’ governing documents and valuation policies, a registered investment adviser and one of its principals ignored for valuation purposes its own trades in certain assets. Instead, the adviser favored the higher valuations provided by a third-party pricing service that did not use actual market inputs, resulting in a significant overvaluation of those securities. For another recent action in which a manager improperly used pricing service marks instead of actual trades, see “SEC Settlement With PIMCO Highlights the Importance of Proper Valuation and Performance Disclosures” (Dec. 8, 2016). This article summarizes the valuation practices that the SEC challenged, the sanctions imposed and the other relevant terms of the settlement order. For additional coverage of the SEC’s recent attention to valuation of illiquid assets, see “Hedge Fund Platinum Partners and Principals Face Civil and Criminal Proceedings From SEC and DOJ Over Alleged Fraudulent Valuation Practices and Liquidity Misrepresentations” (Jan. 12, 2017); and “SEC Continues to Focus on Insider Trading and Fund Valuation” (Jun. 30, 2016).
Read full article …Pay to Play, Revenue Sharing and Wrap Fees Remain on the SEC’s Radar
Mourant Ozannes Partner Touts the Cayman Islands Hedge Fund Industry Amid Local and Foreign Developments
Recent Tax Developments May Make U.K. Limited Companies More Favorable Than U.K. LLPs for U.S. Fund Managers
SEC Urges Advisers Relying Upon Unibanco No-Action Letters to Submit Certain Documentation
ESMA Chair Calls for Stronger Supervisory Tools to Achieve Capital Markets Union
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Women to Watch: Contributions, Achievements and Observations of Outstanding Female Professionals
To mark International Women’s Day, women editors and reporters at ION Analytics interviewed outstanding women in the industries and jurisdictions we cover. In this part, Law Report Group editors Jill Abitbol, Robin L. Barton and Megan Zwiebel profile notable women in data privacy, cybersecurity, private funds and anti-corruption law, including Anne-Gabrielle Haie, Jessica Lee, Micaela McMurrough, Laura Perkins, Amanda Raad, Madelyn Calabrese, Ranah Esmaili and Genna Garver. Enjoy reading their inspiring remarks here.