In the late 1990s, the market for private equity securities (hereinafter “private equity market”) was booming. From quarter to quarter, the number of venture capital deals and the…
Abstract
In the late 1990s, the market for private equity securities (hereinafter “private equity market”) was booming. From quarter to quarter, the number of venture capital deals and the amount invested rose dramatically. Certainly, much of this attention and excitement resulted from the extraordinary market gains experienced by some investors in private equity securities (hereinafter “private equities”). For example, in a book published in 2000, Randall E. Stross described a private equity investment that grew in value by 100,000 percent in less than two years. Today, the extraordinary gains of the late 1990s have subsided. Indeed, some commentators now describe market conditions as a “brutal hit.” The number of deals and the dollars invested are down, and as one commentator put it, there has been an “exodus of momentum investors.” Nonetheless, private equities remain an important alternative investment. Private equities also remain an important compliance area for broker‐dealers and investment advisers. This article reviews some of the compliance issues that could arise in the current environment. Specifically, it focuses on the types of issues that are likely to arise during an examination by the staff of the Securities and Exchange Commission (“SEC” or “Commission”). The article begins with a quick summary of the circumstances under which SEC examiners review broker‐dealers’ and investment advisers’ activities in the private equity market. Next it reviews recent SEC enforcement actions involving private equities and some of the compliance lessons that can be drawn from the cases. Finally, it discusses an examination initiative relating to private equities that the SEC currently has underway. It concludes that private equities remain an important compliance area and an important focus of the SEC’s examination program.
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To summarize and interpret a Risk Alert titled “Investment Adviser Due Diligence Processes for Selecting Alternative Investments and their Respective Managers,” issued by the USA…
Abstract
Purpose
To summarize and interpret a Risk Alert titled “Investment Adviser Due Diligence Processes for Selecting Alternative Investments and their Respective Managers,” issued by the USA Securities and Exchange Commission Office of Compliance Inspections and Examinations on January 28, 2014.
Design/methodology/approach
Focuses on investment advisers selecting underlying alternative investment managers. Discusses the scope of the Staff’s observations. Describes several due diligence practices observed by the staff, including seeking greater transparency; utilizing third-party information aggregators, administrators, custodians, and auditors; using more quantitative analysis; and extending due diligence process to include operational and liquidity reviews. Lists several observed warning indicators that could lead an advisor to conduct additional due diligence, request the underlying manager to make appropriate changes, or reject or veto an investment. Identifies both positive and negative compliance practices.
Findings
The Risk Alert noted several observed risk indicators that could lead an adviser to conduct additional due diligence, request the underlying manager to make appropriate changes, or reject or veto the investment. Advisers can assume that SEC Staff will ask about these risks in future adviser examinations.
Originality/value
Practical guidance from an experienced financial services and securities lawyer.
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Part II and last MECHETTI. Vienna FOUNDED in 1795 by Carlo Mechetti as a dealer; since 1807 in partnership with his nephew, Pietro; the publishing firm styled Carlo Mechetti &…
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Part II and last MECHETTI. Vienna FOUNDED in 1795 by Carlo Mechetti as a dealer; since 1807 in partnership with his nephew, Pietro; the publishing firm styled Carlo Mechetti & Neffe in 1809; after Carlo's death in 1811, Pietro became sole owner; he was succeeded in 1850 by his widow, Therese; c. 1855 the firm was taken over by A. Diabelli & co. (cp. Peter Cappi).
As a result of the changes caused by the preparation of foods gradually passing out of the home into the hands of manufacturers, there has arisen an absolute need for a complete…
Abstract
As a result of the changes caused by the preparation of foods gradually passing out of the home into the hands of manufacturers, there has arisen an absolute need for a complete supervision of the public food supplies. A supervision which shall place some limit upon the substitution of cheaper and inferior methods and dangerous materials in place of the standard formerly used in our homes.
Charles R. McCann and Vibha Kapuria-Foreman
Robert Franklin Hoxie was of the first generation of University of Chicago economists, a figure of significance in his own time. He is often heralded as the first of the…
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Robert Franklin Hoxie was of the first generation of University of Chicago economists, a figure of significance in his own time. He is often heralded as the first of the Institutional economists and the impetus behind the field of labor economics. Yet today, his contributions appear as mere footnotes in the history of economic thought, when mentioned at all, despite the fact that in his professional and popular writings he tackled some of the most pressing problems of the day. The topics upon which he focused included bimetallism, price theory, methodology, the economics profession, socialism, syndicalism, scientific management, and trade unionism, the last being the field with which he is most closely associated. His work attracted the notice of some of the most famous economists of his time, including Frank Fetter, J. Laurence Laughlin, Thorstein Veblen, and John R. Commons. For all the promise, his suicide at the age of 48 ended what could have been a storied career. This paper is an attempt to resurrect Hoxie through a review of his life and work, placing him within the social and intellectual milieux of his time.
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This chapter conducts a systematic comparison of behavioral economics’s challenges to the standard accounts of economic behaviors within three dimensions: under risk, over time…
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This chapter conducts a systematic comparison of behavioral economics’s challenges to the standard accounts of economic behaviors within three dimensions: under risk, over time, and regarding other people. A new perspective on two underlying methodological issues, i.e., inter-disciplinarity and the positive/normative distinction, is proposed by following the entanglement thesis of Hilary Putnam, Vivian Walsh, and Amartya Sen. This thesis holds that facts, values, and conventions have inter-dependent meanings in science which can be understood by scrutinizing formal and ordinary language uses. The goal is to provide a broad and self-contained picture of how behavioral economics is changing the mainstream of economics.
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The most significant event for the School has been the announcement of the creation of the National Centre for Management Research and Development. The Centre is due to open in…
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The most significant event for the School has been the announcement of the creation of the National Centre for Management Research and Development. The Centre is due to open in 1986 and will provide research facilities for up to 20 major projects designed to improve the competitiveness of Canadian business practices.
Communications regarding this column should be addressed to Mrs. Cheney, Peabody Library School, Nashville, Tenn. 37203. Mrs. Cheney does not sell the books listed here. They are…
Abstract
Communications regarding this column should be addressed to Mrs. Cheney, Peabody Library School, Nashville, Tenn. 37203. Mrs. Cheney does not sell the books listed here. They are available through normal trade sources. Mrs. Cheney, being a member of the editorial board of Pierian Press, will not review Pierian Press reference books in this column. Descriptions of Pierian Press reference books will be included elsewhere in this publication.