Debevoise & Plimpton Discusses The SEC’s Robare Decision

On November 7, 2016, the U.S. Securities and Exchange Commission (the “Commission”) overturned an Administrative Law Judge’s (the “ALJ”) initial decision[1] and issued an opinion In re The Robare Group, Ltd., Advisers Act Rel. No. 4566 (Nov. 7, 2016), finding that investment adviser The Robare Group, Ltd. (“TRG”) and its principals, Mark Robare and Jack Jones (collectively, the “Respondents”), negligently failed to fully and fairly disclose potential conflicts of interest arising from an arrangement with a mutual fund manager (the “Fund Manager”) pursuant to which the Fund Manager paid Robare for maintaining client assets in certain mutual funds … Read more

Debevoise & Plimpton discusses JOBS Act General Solicitations

In a September 9 letter (“Letter”),[1] the Division of Swap Dealer and Intermediary Oversight (“DSIO”) of the Commodity Futures Trading Commission (“CFTC”) granted exemptive relief permitting general solicitation under certain circumstances by commodity pool operators (“CPOs”) that rely on CFTC Regulation 4.7(b) and 4.13(a)(3). The exemptive relief was issued in response to amendments made by the Securities and Exchange Commission (“SEC”) pursuant to the Jumpstart Our Business Startups Act (“JOBS Act”) to permit general solicitation in certain unregistered securities offerings. The exemptive relief will facilitate the use of Rules 506(c) and 144A(d)(1) by a large number of CPOs, including private … Read more

Debevoise & Plimpton discusses Treatment of Special Purposes Vehicles under the Advisers Act

The treatment of special purposes vehicles (“SPVs”) used to facilitate investments in portfolio companies has presented issues under Rule 206(4)-2 under the U.S. Investment Advisers Act of 1940 (the “Custody Rule”) since the current version of the Custody Rule was adopted in December 2009. Private fund managers often subject their funds to an annual audit in accordance with the “Annual Audit Approach” to avoid certain burdensome provisions of the Custody Rule, including a “surprise” examination by an independent accountant.[1] One question has been the circumstances under which the SPV should be separately audited from the main fund for purposes of … Read more

Debevoise & Plimpton discusses SEC’s Guidance on Supervisory Liability for a Broker-Dealer’s Compliance and Legal Personnel

On September 30, the staff of the Securities and Exchange Commission’s (the “SEC”) Division of Trading and Markets addressed an issue of great interest to the compliance and legal community concerning the circumstances under which the compliance and legal staffs of broker-dealers may be viewed as “supervisors” and thus face liability under the securities laws for failing to supervise firm employees.[1] The guidance, which appears in the form of responses to frequently asked questions (the “FAQs”), seems to confirm the industry’s long-held view that supervisory liability does not attach unless a compliance or legal employee truly functions in a supervisory

Read more

Editor's Tweet |
Editor's Tweet: Debevoise & Plimpton discusses SEC's Guidance on Supervisory Liability for a Broker-Dealer's Compliance and Legal Personnel