Media Mentions
Schulte partner Ben Kozinn quoted in Hedge Fund Law Report
Aug 4, 2023, 12:00 AM
Schulte partner Ben Kozinn recently spoke with Robin L. Barton from The Hedge Fund Law Report, discussing the latest risk alert from the SEC's Division of Examinations that addresses three areas of emphasis in advisers’ exams: testimonials and endorsements; third-party ratings; and Form ADV. Ben noted, “We are seeing a focus in exams on Marketing Rule compliance. This SEC has been aggressive on just about everything with respect to private fund managers, and now with the Marketing Rule, there are just more things they can criticize.”
With regard to endorsements, he stated that “[p]rivate fund managers have not historically used what you traditionally think of as endorsements or testimonials," rather using awards as endorsements for their marketing. Ben explained that in order for advisers to do that, they "must have appropriate disclosures and disclaimers as to what the award means, who gave it to you, how you got involved with them, whether you paid anything to be considered for the award and why you won.” He recommends that fund managers work with quality compliance consultants and/or counsel because marketing “is an area now where you need to be very cautious.”
Read more here.
Related Insights
Alerts
On June 28, 2024, the US Department of the Treasury’s Financial Crimes Enforcement Network (“FinCEN”) issued a notice of proposed rulemaking that would amend existing anti-money laundering/countering the financing of terrorism (“AML/CFT”) program[1] regulations to require that financial institutions establish, implement and maintain effective, risk-based and reasonably designed AML/CFT programs with certain minimum components, including a mandatory risk assessment process (hereinafter, “Proposed Rule”).[2] For purposes of the Proposed Rule, “financial institutions” include: banks; broker dealers; mutual funds; futures commission merchants (“FCMs”) and introducing brokers in commodities (“IB-Cs”); insurance companies; money services businesses (“MSBs”); casinos and card clubs; dealers in precious metals, precious stones or jewels; operators of credit card systems; loan or finance companies; and housing government sponsored enterprises.[3] In addition to establishing minimum risk assessment requirements for these AML/CFT programs, the Proposed Rule would require that financial institutions document each component of their AML/CFT programs and make this documentation available to FinCEN or its designee, which can include the appropriate agency to which FinCEN has delegated examination authority,[4] or the appropriate SRO.[5] The Proposed Rule would also require that these AML/CFT programs be approved and overseen by the financial institution’s board of directors or, if the financial institution does not have a board of directors, an equivalent governing body.
Alerts
On June 28, 2024, the US Department of the Treasury’s Financial Crimes Enforcement Network (“FinCEN”) issued a notice of proposed rulemaking that would amend existing anti-money laundering/countering the financing of terrorism (“AML/CFT”) program[1] regulations to require that financial institutions establish, implement and maintain effective, risk-based and reasonably designed AML/CFT programs with certain minimum components, including a mandatory risk assessment process (hereinafter, “Proposed Rule”).[2] For purposes of the Proposed Rule, “financial institutions” include: banks; broker dealers; mutual funds; futures commission merchants (“FCMs”) and introducing brokers in commodities (“IB-Cs”); insurance companies; money services businesses (“MSBs”); casinos and card clubs; dealers in precious metals, precious stones or jewels; operators of credit card systems; loan or finance companies; and housing government sponsored enterprises.[3] In addition to establishing minimum risk assessment requirements for these AML/CFT programs, the Proposed Rule would require that financial institutions document each component of their AML/CFT programs and make this documentation available to FinCEN or its designee, which can include the appropriate agency to which FinCEN has delegated examination authority,[4] or the appropriate SRO.[5] The Proposed Rule would also require that these AML/CFT programs be approved and overseen by the financial institution’s board of directors or, if the financial institution does not have a board of directors, an equivalent governing body.