SEC Enforcement Action against Private Equity Fund Adviser

On June 1, 2016, the SEC announced that a private equity fund adviser and its principal owner agreed to pay more than $3.1 million to settle SEC charges that, among other things, they acted as an unregistered broker and acted contrary to governing documents of funds they served. The charges were against Blackstreet Capital Management, LLC (Blackstreet) and its principal owner, Murry N. Gunty (the Respondents). The Respondents agreed to the settlement without admitting or denying the SEC’s allegations.

SEC Issues Guidance on Business Continuity Planning for Registered Investment Companies

The Securities and Exchange Commission’s (SEC or Commission) Division of Investment Management recently issued a guidance update (Guidance) addressing business continuity plans (BCPs). In the Guidance, the Division’s Staff (the Staff) underscores the importance of mitigating operational risks related to significant business disruptions, particularly through proper business continuity planning for registered investment companies (Funds).

FINRA Proposes Amendments to Rules Governing Communications with the Public

The Financial Industry Regulatory Authority (FINRA) recently filed with the Securities and Exchange Commission (SEC or Commission) proposed amendments to certain aspects of the FINRA rules governing member firms’ communications with the public. The proposed rules would revise the filing requirements of FINRA Rule 2210 (Communications with the Public) and FINRA Rule 2214 (Requirements for the Use of Investment Analysis Tools) and the content and disclosure requirements in FINRA Rule 2213 (Requirements for the Use of Bond Mutual Fund Volatility Ratings). This article addresses the impact of the proposed rule revisions, if adopted, on mutual funds.

MSRB Rule G-37 Amendments on Political Contributions and Related Issues Are Deemed Approved

Earlier this year, the Securities and Exchange Commission (SEC) was deemed to have approved the Municipal Securities Rulemaking Board’s (MSRB) amendments to MSRB Rule G-37 on political contributions and prohibitions on municipal securities business, and MSRB Rules G-8, G-9 (required records and preservation period, respectively) and Forms G-37 and G-37x (required reporting to the MSRB).

The amendments will become effective on August 17, 2016. Once effective, amended Rule G-37 will extend the core standards under Rule G-37 to municipal advisors, their political contributions and the provision of municipal advisory business. The amendments are designed to address potential “pay-to-play” practices by municipal advisors consistently with the MSRB’s existing regulation of dealers.

To learn more about these developments and other investment management news, please contact a member of the Ballard Spahr Investment Management Group or the attorney with whom you regularly work.


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