Media Mentions
Schulte partner Melissa Goldstein quoted in FundFire article, “FinCEN Adopts Narrower Anti-Money Laundering, Counter Terrorism Rule”
September 11, 2024
Schulte Roth & Zabel partner Melissa Goldstein recently spoke with FundFire for their coverage on the approved and scaled-back version of the proposed US Department of the Treasury's Financial Crimes Enforcement Network (FinCEN) rule, which is aimed at strengthening anti-money laundering (AML) and counter-terrorism financing practices for investment advisers.
Melissa stated that the rule will have a “significant impact” on all asset managers, regardless of whether they already have voluntary AML procedures in place. “The rule is prescriptive in what is required, and these investment advisors will be subject to examination, and the penalties for violating these laws can be quite significant,” she noted.
The rule, effective January 1, 2026, is a response to concerns about the use of investment advisers for money laundering related to foreign corruption, fraud and tax evasion.
Read more here. (subscription required)
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On Aug. 19, 2024, the US Securities and Exchange Commission (the “SEC”) charged Obra Capital Management, LLC (“Obra Capital”) with violations of Rule 206(4)-5 under the Investment Advisers Act of 1940, otherwise known as the “Pay-to-Play Rule” (the “Rule”), arising out of a $7,150 campaign contribution made by an individual prior to joining Obra Capital.[1] This campaign contribution was made to a government official in Michigan who had influence over hiring investment advisers for the Michigan Public Employees’ Retirement Fund (the “Michigan Pension Fund”), which was an investor in a fund managed by Obra Capital (the “Obra Fund”). Notably, the Michigan Pension Fund had been an investor in the Obra Fund for several years prior to the hiring of the individual who made the contribution. And perhaps even more notably, this campaign contribution was made several months prior to the individual becoming a “Covered Associate” (as defined by the Rule[2]) of Obra Capital. By virtue of Obra Capital continuing to provide investment advisory services for compensation to the Obra Fund in which the Michigan Pension Fund was invested after hiring the individual, Obra Capital violated the Rule and agreed to pay a $95,000 fine to settle the charges.
Alerts
On Aug. 19, 2024, the US Securities and Exchange Commission (the “SEC”) charged Obra Capital Management, LLC (“Obra Capital”) with violations of Rule 206(4)-5 under the Investment Advisers Act of 1940, otherwise known as the “Pay-to-Play Rule” (the “Rule”), arising out of a $7,150 campaign contribution made by an individual prior to joining Obra Capital.[1] This campaign contribution was made to a government official in Michigan who had influence over hiring investment advisers for the Michigan Public Employees’ Retirement Fund (the “Michigan Pension Fund”), which was an investor in a fund managed by Obra Capital (the “Obra Fund”). Notably, the Michigan Pension Fund had been an investor in the Obra Fund for several years prior to the hiring of the individual who made the contribution. And perhaps even more notably, this campaign contribution was made several months prior to the individual becoming a “Covered Associate” (as defined by the Rule[2]) of Obra Capital. By virtue of Obra Capital continuing to provide investment advisory services for compensation to the Obra Fund in which the Michigan Pension Fund was invested after hiring the individual, Obra Capital violated the Rule and agreed to pay a $95,000 fine to settle the charges.