In the Spring 2003 issue of this Journal, I addressed the regulatory uncertainty surrounding the treatment of broker‐dealers’ expense‐sharing arrangements. As pointed out in that article, in 2002 the National Association of Securities Dealers, Inc. (NASD) conducted a comprehensive...

“The lot of a holder of junior preferred stock is not always a happy one,” observed the Delaware Chancery Court in Benchmark Capital Partners IV, L.P. v. Vague. It certainly wasn’t for Benchmark Capital Partners. Benchmark’s fate holds important lessons for institutions and funds that...

The securities industry is no stranger to regulatory compliance. However, the breakpoints issue is emerging as one of its latest challenges. Education and technology are an important part of the solution. A breakpoint is the level or volume of investment at which up‐front commissions on...

Following a spate of corporate scandals, the bursting of the “Internet bubble,” and media revelations of research analyst bias at the nation’s largest investment banks, regulators launched a series of investigations and rulemaking initiatives that culminated in the adoption of extensive...

If the past 30 years of history have taught anything, it is that white‐collar offenders often run afoul of the law by their participation in cover‐ups rather than their part in a substantive criminal offenses. In August 1974, President Richard Nixon was forced to resign as President of the...

Anti‐money laundering is a global initiative that is a priority at all financial institutions. It is important that while considerable focus is being placed on compliance, firms cannot forget another top priority: their clients. Luckily, these two areas of focus are not mutually exclusive. The...

This article presents an argument that the SEC, in its attempts to control corporate information disclosure, too often focuses on discrete bits of information as the driving source of investment determinations, and in doing so runs the danger of overlooking the fluid and constantly changing...

Recent SEC actions, including its first settlement of an enforcement case, provide specific guidance and some surprising points of emphasis concerning the implementation of Regulation FD (Fair Disclosure). Although there is nothing inherently unlawful about one‐on‐one meetings with...

This article discusses the implications of heightened regulatory attention to hedge funds by focusing on the practical questions that are on the minds of many in the hedge fund industry and, possibly, even in the thoughts of the regulators themselves. The primary regulatory condition relevant to...

While many hedge fund activities have attracted more scrutiny recently, the use of soft dollars by hedge funds has been a source of regulatory concern for years. A fund manager’s decision under a classic soft dollar arrangement to pay more than the lowest commission in return for research or...