More On Legal & Compliancefrom The Advisor's Professional Library
- Recent Changes in the Regulatory Landscape 2011 marked a major shift in the regulatory environment, as the SEC adopted rules for implementing the Dodd-Frank Act. Many changes to Investment Advisers Act were authorized by Title IV of the Dodd-Frank Act.
- Client Commission Practices and Soft Dollars RIAs should always evaluate whether the products and services they receive from broker-dealers are appropriate. The SEC suggested that an RIAs failure to stay within the scope of the Section 28(e) safe harbor may violate the advisors fiduciary duty to clients, so RIAs must evaluate their soft dollar relationships on a regular basis to ensure they are disclosed properly and that they do not negatively impact the best execution of clients transactions.
The FBI raided the offices of three hedge funds on Monday, seeking documents related to a series of insider trading investigations directed by the office of Manhattan U.S. Attorney Preet Bharara.
Bloomberg reports the offices of Level Global Investors LP and Diamondback Capital Management LLC, firms founded by alumni of SAC Capital Advisors, were searched by FBI agents. Agents also executed a search warrant at the offices of Loch Capital Management.
“The government has decided it needs to use force to obtain all the information that it needs,” Former AdvisorOne columnist Jacob Frenkel told Bloomberg. Frenkel is also a former federal prosecutor and lawyer with the Securities and Exchange Commission and a partner in the law firm of Shulman, Rogers, Gandal, Pordy & Ecker, P.A. “It has opted not to issue grand jury subpoenas but instead use the search warrant process.”
Steve Bruce, a spokesman for Diamondback, declined to comment for the story. Andy Merrill, a spokesman for Level Global, confirmed to Bloomberg that the FBI had searched the hedge fund’s offices. Timothy McSweeney of Loch Capital didn’t immediately respond to a phone message.
As Bloomberg notes, Diamondback, based in Stamford, Conn., owned U.S.- listed stocks in 706 companies at the end of the third quarter, with a market value of $4.13 billion, most of it in energy companies and financial services, according to data compiled by Bloomberg. Level Global, with offices in Greenwich, Conn., and New York, owned stocks in 77 companies valued at $3.08 billion, with 34% of that in consumer discretionary stocks and 31% in information technology companies.
Its biggest U.S. stock holding by market value is a 5.8% stake in Virgin Media Inc., the United Kingdom's second-largest pay-television company, according to regulatory filings for the third quarter.