Insights

On December 8, the United States Court of Appeals for the Second Circuit reversed the March 2014 convictions of former Jefferies RMBS trader Jesse Litvak for fraud against the United States and making false statements and vacated Litvak’s conviction for securities fraud, remanding the case to the District Court for a new trial on the…

Client Alerts | December 10, 2015 | Hedge Funds

On November 2, 2015, new partnership audit rules were enacted as part of The Bipartisan Budget Act of 2015. The new audit rules could have a significant impact on partnerships generally and on investment partnerships in particular. The new rules were enacted because the IRS and Congress felt that the current audit rules, referred to…

Client Alerts | December 1, 2015 | Hedge Funds

This newsletter briefly highlights certain tax issues and planning that hedge fund managers should consider (or reconsider) before year-end. Tax rates are scheduled to remain the same in 2016. 1.  Federal Income Tax Rates in 2015 and 2016.      Long-term capital gains and qualified dividend income:    25%*      Ordinary income:    44.6%*      (*includes effect of net income investment tax and 3%…

Client Alerts | November 18, 2015 | Hedge Funds

The Bureau of Economic Analysis (BEA) Form BE-180, the 2014 Benchmark Survey of Financial Services Transactions Between U.S. Financial Services Providers and Foreign Persons, is due by November 1, 2015 (30 or 60 day extensions may be obtained), and may apply to many hedge fund managers. The purpose of Form BE-180 is for the BEA…

Client Alerts | October 20, 2015 | Hedge Funds

As part of the 2015 New York State corporate tax reform, significant changes were made to the definition of investment capital under Article 9-A (Corporate Tax) of the New York Tax Law. Income from investment capital (generally, stocks held for more than a year) is subject to preferential treatment in New York State and New…

Client Alerts | September 28, 2015 | Hedge Funds

On September 18, 2015, the IRS issued Notice 2015-66 announcing its intent to amend FATCA regulations to extend timelines for certain transition rules and to reduce certain compliance burdens on withholding agents by modifying the rules for grandfathered obligations. Most importantly, withholding on gross proceeds will not be required until January 1, 2019 (extended from…

Client Alerts | September 25, 2015 | Hedge Funds

On September 17, 2015, the IRS issued final regulations (the “Final Regulations”) requiring withholding on certain dividend equivalent payments beginning January 1, 2017. (Please see our prior newsletter regarding the delay of imposing withholding on dividend equivalents.) The Final Regulations reflect some important changes suggested in comments to the IRS following the issuance of the…

Client Alerts | September 22, 2015 | Hedge Funds

We have previously written to our clients about the importance of complying with the requirements of the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the “HSR Act”) when building positions that may become activist in the future. [“Antitrust Filing Mistakes Can Cost Activists“]. On August 24, 2015 the United States Federal Trade Commission (the…

Client Alerts | August 26, 2015 | Mergers & Acquisitions | Investor Activism | Hedge Funds

The tax benefits of making investments through private placement life insurance (“PPLI”), including investments in hedge funds, are very significant (i.e., the potential elimination of income tax and possibly estate tax as well). For information on the tax benefits and risks of PPLI click here to see the chapter written by partner Jeff Bortnick from…

Client Alerts | July 7, 2015 | Hedge Funds

On June 30, 2015, U.S. District Judge Ronnie Abrams handed down an important decision affecting the SEC’s controversial practice of bringing insider trading enforcement actions in the form of in-house administrative proceedings instead of as civil court actions. In a 23-page opinion, Judge Abrams refused to enjoin the SEC from continuing with an ongoing administrative…

Client Alerts | July 1, 2015 | Hedge Funds