A hedge fund manager typically falls within the definition of an “investment adviser” under the Investment Advisers Act of 1940 (“Advisers Act”). Persons who fall within this definition generally must register with the SEC and are subject to all applicable requirements under the Advisers...

For over two hundred years, our nation’s legal system has been based on the “American Rule” ‐ with each party bearing its own litigation costs. As the Supreme Court noted in 1975, this distinctly American tradition is “deeply rooted in our history and in congressional policy, and it is...

In March 2004, the NASD and the New York Stock Exchange (the “NYSE,” together with the NASD, the “SROs”) issued a joint memorandum (the “2004 Joint Memorandum”) that provides interpretative guidance on NASD Rule 2711 and the research analyst provisions of NYSE Rules 351 and 472, as...

Amid all the bad news of Wall Street wrongdoing, there is good news for financial services companies and compliance staff: A new generation of technology, called “behavior detection”, means that more and more financial abuses and violations will be detected in the early stages rather than...

In the wake of the mutual fund scandals involving market timing and late‐day trading, the Securities and Exchange Commission recently issued new investment company governance regulations. The widely debated new rules require most investment companies to ensure that that at least 75% of their...

A major change is taking place in the strategy for fighting fraud. The emphasis is shifting from 20% prevention/deterrence and 80% detection/investigation to the opposite ratio. The high returns on investment being achieved by companies that fight fraud vigorously suggest that an ounce of...

Increasingly, allegations of significant corporate wrongdoing and inquiries from governmental agencies result in companies initiating internal investigations as a practical tool to find out whether there was wrong doing, what happened, and how to prevent it from happening again. This article...

Any transaction or explanation that does not make sense, any failure to follow policy, or any obvious conflicts of interest between investigator and investigated may be a legitimate sign that points toward fraud. Generally, there is strength in numbers: The more signs you find, the more likely...

The Sarbanes‐Oxley Act outlawed some of the worst practices of the failed companies, and imposed significant changes in accounting and auditing rules, as well as oversight of public accounting. This article contains a checklist that is intended to provide principal executive, financial and...

The SEC has proposed rules governing offerings of asset‐backed securities (ABS) that will impose extensive new requirements for disclosure and periodic reporting, including substantial additional information regarding various parties involved in securitization transactions. When final rules...