May 13, 2021

First 100 Days As GC/CCO: Managing Daily Work, Performing Risk Assessments and Looking Ahead (Part Three of Three)

During the first 100 days on the job, a new GC/CCO is forced to adjust to the role’s rigors while simultaneously performing the position’s legal and compliance duties beginning day one. In conjunction with the knowledge and relationships they will develop their first 100 days, GC/CCOs must continuously evaluate the firms’ weaknesses and risks with an eye toward introducing reforms in the next 100 days and beyond. This third article in a three-part series discusses how new GC/CCOs can balance getting up to speed at their new firm with performing the day-to-day legal and compliance work it requires, while also evaluating necessary changes and improvements going forward. The first article offered guidance for starting the GC/CCO role on the right foot, including how to prepare before day one and ways to set the right tone for the new role. The second article explored why and how GC/CCOs can prioritize gathering knowledge about the firm and building the foundation for solid relationships with key people in their first 100 days. See our three-part series: “Why Fund Managers Must Review Their Positions on Succession Planning and CCO Outsourcing” (Jun. 7, 2018); “What Fund Managers Should Consider When Hiring and Onboarding CCOs; Determining CCO Governance Structures” (Jun. 14, 2018); and “A Succession‑Planning Roadmap for Fund Managers” (Jun. 21, 2018).

Disclosure of Exculpatory Evidence in “Parallel” Civil and Criminal Investigations

When must the DOJ review files held by other federal agencies for exculpatory evidence? According to a recent opinion in a case in the Northern District of Illinois, which has potential discovery implications for white collar defendants and the government, the DOJ had an affirmative obligation to review the files of the CFTC for exculpatory information because the two agencies cooperated and coordinated throughout their respective investigations of two traders. Notably, the court looked beyond clear-cut instances of joint interviews or document sharing and considered circumstantial evidence of coordination. In a guest article, Ryan Rohlfsen, Michael Marzano, Brooke Cohen and Sean Adessky of Ropes & Gray explain how the opinion indicates that the DOJ’s increased tendency to work with – and often rely on – other agencies may trigger increased discovery obligations, forcing the DOJ to turn over exculpatory evidence beyond its own records. For more on regulatory cooperation, see “The Impact of the SEC-CFTC Memorandum of Understanding on Fund Managers” (Aug. 9, 2018).

Diversity and Inclusion in Asset Management: Key Challenges and Impacts of 2020 Events (Part One of Two)

The social upheaval of 2020 shed a bright new light on persistent and pervasive social and economic injustice. The investment management industry, especially the front office, has traditionally been a white male bastion. A panel at the Clifford Chance Global Funds Conference 2021 took a deep dive into the state of diversity and inclusion (D&I) in the investment management industry. Fionnuala Oomen, head of strategy and delivery in the London private funds group at Clifford Chance, moderated the discussion, which featured Clifford Chance inclusion, diversity and wellbeing specialist Leana Coopoosamy and senior associate Alice Jefferis, as well as Adebanke Adeyemo, GC at Vantage Infrastructure; Justin Onuekwusi, fund manager at Legal & General Investment Management; and Karis Stander, managing director of Investment20/20. This first article in a two-part series explores the panel’s analysis of the key challenges in fostering D&I and the impact of the events of 2020. The second article will cover the panel’s discussion of the structural barriers to D&I, strategies for overcoming those barriers and the impact of investors on D&I. See “Practical Guidance for Advisers Seeking to Foster Diversity and Inclusion” (Dec. 12, 2019).

GameStop and the Challenges of Monitoring Communication Channels

Many of the early news stories about the runup in the price of GameStop shares earlier this year focused on the ability of retail investors to collaborate and cause a short squeeze for sophisticated hedge funds. The true story was less of a David and Goliath tale, according to the speakers at a recent program presented by regulatory compliance technology firm ComplySci. Notably, one of the key players was registered with FINRA and employed by MassMutual, raising questions about whether MassMutual was aware of its employee’s outside activities, as well as his use of Reddit and other communication channels. The program, which featured Robert A. Cruz, vice president at communications software firm Smarsh Inc., and Amy Kadomatsu, ComplySci’s CEO, looked at the conditions that gave rise to, and the lessons from, the GameStop surge, as well as how firms can manage the ever-growing number of available communication channels. This article highlights the speakers’ insights. See our three-part series on electronic communications: “SEC Takes Steps to Drill Down” (Nov. 30, 2017); “Information Request List Provides Insight Into SEC Expectations on the Use by Advisers and Employees” (Dec. 7, 2017); and “Six Key Issues to Address in Policies and Guidance on Preparing for Future Scrutiny” (Dec. 14, 2017).

Most Hedge Fund Managers Met or Exceeded Targets Last Year, According to Recent Global Hedge Fund Study (Part One of Two)

During the fourth quarter of 2020, the Alternative Investment Management Association (AIMA), in cooperation with Simmons & Simmons and Seward & Kissel, surveyed more than 300 hedge fund managers and investors to gauge their views on the current status, prospects and direction of the hedge fund industry. The Global Hedge Fund Benchmark Study found that most hedge fund managers met or exceeded their targets over the past year and are confident about their future prospects. This two-part series reviews the key findings from the study, with additional commentary from Tom Kehoe, AIMA’s managing director and global head of research and communications. This first article outlines the portions relating to the respondent demographics; performance and outlook; fees charged by funds; and liquidity and redemption terms. The second article will review fund launch terms, industry challenges, responsible investing, investment in new technologies and succession planning. For analysis of a prior AIMA survey of hedge fund managers, see “Hedge Fund Industry Remains Agile and Resilient” (Oct. 8, 2020).