July 28, 2011

SEC Charges Investment Adviser With Fraud

The SEC brought an administrative action against Benchmark Asset Managers LLC, a registered investment adviser owned by Otto Sam Folin, and Harvest Managers, LLC. The SEC found that Benchmark and Folin provided investment advice to clients for compensation, raised money from investors and advisory clients by offering and selling a variety of securities and managed and advised a group of hedge funds known as the Safe Haven Investment Portfolios LLC.

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July 27, 2011

SEC Staff Issues Summary Report of Sweep Examination of Structured Products Sold to Retail Investors

The SEC issued a report identifying common weaknesses seen in sales of structured securities products and describing measures by broker-dealers to better protect retail investors from fraud and abusive sales practices.  The report summarizes the results of a sweep examination of the retail structured securities products business of 11 broker-dealers, covering a cross-section of the industry. Structured securities products generally do not represent ownership of a particular asset (such as stock in a manufacturing company); instead, the products promise returns to investors based on the performance of one or more underlying assets.

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July 26, 2011

Registered Representative Defrauds Customers

The SEC brought an administrative action under the Securities Exchange Act of 1934 and Investment Advisers against William K. Harrison, who was associated with Wachovia Securities, Inc. as a registered representative from 2003 until October 13, 2008.  The SEC found that between approximately December 2007 and October 2008, Harrison used misrepresentations and omissions of material fact to defraud at least forty-two Wachovia brokerage customers of at least $8 million in customer funds. On or around December 2007, Harrison began offering his Wachovia customers an investment opportunity outside of Wachovia through an advisory firm he owned.

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July 26, 2011

SEC Re-Proposes New Shelf Eligibility Requirements for Asset-Backed Securities

The SEC re-proposed for public comment some rules requiring greater accountability and enhanced quality around asset-backed securities (ABS) when issuers seek to use an expedited registration process known as shelf registration.  The SEC initially proposed rules in April 2010 to significantly revise the regulatory regime for ABS. Subsequent to that proposal, the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act) was signed into law and addressed some of the same ABS concerns. In light of those Dodd-Frank Act provisions and comments received from the public, the SEC re-evaluated its initial proposals.

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July 26, 2011

SEC Adopts Large Trader Reporting Regime

The SEC voted unanimously to adopt a new rule establishing large trader reporting requirements to enhance the agency’s ability to identify large market participants, collect information on their trading, and analyze their trading activity.

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July 22, 2011

DC Court of Appeals Strikes Down Proxy Access Rule

The U.S. Court of Appeals in Washington struck down the “proxy access rule” adopted by the SEC pursuant to the Dodd-Frank Wall Street Reform and Consumer Protection Act.  The rule, had it been effective, would have allowed investors or shareholder groups that own at least 3% of a company’s stock for three years to put their own board nominees on proxy statements.

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July 22, 2011

Seward & Kissel Posts a Memorandum on the Adoption by the SEC of the Final Rule Defining Family Offices

Seward & Kissel LLP recently posted “Memorandum: SEC Adopts Final Rule Defining Family Offices.”

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July 21, 2011

David Blass Named Chief Counsel in Division of Trading and Markets

The SEC named David W. Blass Chief Counsel and Associate Director for the SEC’s Division of Trading and Markets.  The Division’s Office of Chief Counsel provides legal and policy advice to the SEC in establishing rules on matters affecting broker-dealers and the operation of the securities markets.  The office also issues interpretations regarding matters arising under the Securities Exchange Act of 1934.

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July 19, 2011

SEC Adopts Technical Amendment to Procedures for Filing Applications for Orders for Exemptive Relief under Section 36 of the Exchange Act

The SEC is making technical amendments to the rule by which applications for exemptive relief under section 36 of the Securities Exchange Act of 1934 may be submitted electronically. The amendments are intended only to clarify and update references to an SEC website address and to eliminate certain formatting requirements.

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July 15, 2011

Seward & Kissel Posts a Memorandum on Changes to the Registered Investment Adviser Performance Compensation Rule

Seward & Kissel LLP recently posted “Memorandum: SEC Changes Registered Investment Adviser Performance Compensation Rule”. Click here to access the memorandum. Click here to access the 40 Act Blog coverage of the press release and the order.

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