Category Archives: Securities Law

Intro to Private Equity Funds

A private equity fund is an investment entity formed by an investment adviser (often also referred to as a fund manager or sponsor), that raises capital from investors to make investments in private companies under a specified investment strategy. Typically, the investors commit to investing a certain amount of capital over time, in one or more capital calls made over the course of the private equity fund’s life cycle. The investors are passive and do not participate in the management of the fund or the selection of its investments. The fund manager is responsible for investing the assets pursuant to the fund’s investment strategy. Additionally, private equity funds are often “blind” (in that the investor does not know in advance what their money will be invested in) and anonymous (in that no investor knows the identities of the other investors). Fund managers typically charge a management fee based on a set percentage of the value of the fund’s….. To continue reading this legal news please click Read full information...

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Dual-class shares: marching toward merit regulation?

For the first time since 2015, the SEC has its full complement of five commissioners.  That’s a good thing.  And at least one new Commissioner – Robert Jackson – seems to have hit the ground running.  For example, he made a speech in San Francisco just the other day in which he expressed his disfavor of dual-class stock, suggesting that it would create “corporate royalty”. Specifically, because shareholders in at least some dual-class companies have no voting rights, leadership of the company could be passed down through the generations in perpetuity. Commissioner Jackson is a smart man – I’ve seen him speak at a number of programs, and he’s demonstrated his intelligence as well as his telegenic appearance.  His use of the “corporate royalty” meme also shows that he’s witty, though don’t think we need to worry too much about CEO titles becoming hereditary. What I do think we may need to….. To continue reading this legal news please click Read full information...

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Stifel Nicolaus & Company Sanctioned In Connection to Alleged Rule Violations

Public records published by the Financial Industry Regulatory Authority (FINRA) and accessed on February 15, 2017 indicate that Missouri-based broker-dealer Stifel Nicolaus & Company has been sanctioned by FINRA in connection to alleged rule violations. Fitapelli Kurta is interested in speaking to investors who have complaints regarding Stifel Nicolaus & Company (CRD# 739). According to the firm’s BrokerCheck report, FINRA sanctioned the firm in connection to findings that in 18 occasions between April and June 2014, the firm “accepted and held 12 customer orders in over-the-counter (OTC) securities, traded for its own account at prices that would have satisfied the customer orders,” and subsequently failed to enter or to immediately enter the clients’ orders “up to the size and at the same price at which it traded for its own account or at a better price.” FINRA’s findings state that the firm asserted its “no-knowledge….. To continue reading this legal news please click Read full information...

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CL King & Associates Allegedly Failed to Supervise

Publicly available records published by the Financial Industry Regulatory Authority (FINRA) and accessed on February 16, 2017 indicate that New York-based broker-dealer firm CL King & Associates has been sanctioned by FINRA in connection to alleged rule violations. Fitapelli Kurta is interested in hearing from investors who have complaints regarding C.L. King & Associates (CRD# 6183). According to the firm’s BrokerCheck report, FINRA found that from January 1, 2014 until November 1, 2014, the firm failed to enforce procedures related to the “distribution of research between the Firms’s research and its trading and sales personnel,” and additionally that it failed to properly supervise the process by which research reports were distributed by the firm to its customers, contravening NASD Rule 3010 as well as FINRA Rules 5280(b) and 2010. Rule 5280 mandates the establishment, maintenance and enforcement of policies and protocols “reasonably….. To continue reading this legal news please click Read full information...

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Guest Post: Court Requires Insurers to Advance Insureds’ Defense Costs

In the following guest post, Syed Ahmad, Brittany Davidson, and Andrea DeField of Hunton & Williams LLP take a look at a very interesting New York trial court decision relating to D&O insurers’ duty to advance defense costs. I would like to thank the authors for their willingness to allow me to publish their article as a guest post on my site. I welcome guest post submissions from responsible authors on topics of interest to this site’s readers. Please contact me directly if you would like to submit a guest post. Here is the authors’ guest post.   ***************************************   A New York trial court recently ruled against D&O insurers who refused to advance defense costs prior to the resolution of a criminal prosecution and civil enforcement action against their insureds. The Court granted the insureds’ preliminary injunction motion and directed the insurers to advance defense costs explaining that without preliminary….. To continue reading this legal news please click Read full information...

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