On July 20, 2004, the Securities and Exchange Commission (SEC) published for comment proposed rules under the Investment Advisers Act of 1940 (the Act), which would require many non‐U.S. hedge fund advisers to be registered with the SEC. The proposed rules would require non‐U.S. investment...

Hackers and crackers are constantly surfing the Web looking for vulnerable systems. But the most dangerous hackers are the enemies within. The amount that a company should invest in system security depends on its level of risk. To see how much is at risk, a company should create fraud and theft...

In the wake of the market timing, late trading, and conflict‐of‐interest‐related scandals in the investment company industry, the Securities and Exchange Commission (SEC) recently adopted rules and rule amendments designed to enhance the governance practices of registered investment...

Compliance with SEC Rule 38a‐1 and the requirement for a fund to have a chief compliance officer (CCO) requires fund companies to take an in‐depth look at how their organizations deal with compliance as a whole and how their service providers fit into the compliance equation. A fundamental...

There never has been a higher probability that your business will become directly or indirectly involved in a government fraud investigation. With the right advice, it need not end in disaster. This article provides management with a practical guide on how properly to respond to a such an...

This article discusses the need for business continuity plans and includes a broad overview of the requirements imposed on broker‐dealers. A section discusses “top 10” questions for firms to ask themselves when developing a plan. References include NYSE and NASD rules and other resources...

What makes an audit committee effective, especially when corporations must navigate their way through difficult times? Audit committee members must be financially literate and capable of understanding the company’s business and financial plans, but above all they must have skeptical habits of...

The NASD and the SEC are looking into methods, fees, conflicts of interest, and other issues related to fairness opinions. The fairness opinion process as currently practiced is likely to be deemed inadequate, and as such will offer less protection to boards of directors. To protect the role of...

Mutual funds, along with other open‐ended instruments such as investment companies, investment trusts, and unit trusts, fall into the category of collective investment schemes (CIS). The OECD estimates that CIS assets in the 16 largest developed countries increased from $3.4 trillion to $15...

Following the recent scandals that erupted at the end of the economic bubble, the Sarbanes‐Oxley Act was passed as a regulatory “cure.” However, regulation is only part of the cure. The reason fraud happens in the first place often stems from performance deterioration. Corporate governance...