Insights

Introduction The staff of the Securities and Exchange Commission (the “SEC”) recently issued a Risk Alert highlighting violations of the Custody Rule. These violations were observed in the course of the SEC’s National Examination Program (the “NEP”) of registered investment advisers. Rule 206(4)-2 (the “Custody Rule”) under the Investment Advisers Act of 1940, as amended…

Client Alerts | April 22, 2013 | Hedge Funds

On April 8, 2011, the Delaware Court of Chancery (“Court”) sent preliminary tremors through the M&A community when it denied a motion to dismiss a breach of contract claim in a case of first impression for the Court. In denying the motion to dismiss, the Court indicated a willingness to consider the possibility that a…

Client Alerts | April 10, 2013 | Mergers & Acquisitions

This update is a reminder that the April 10, 2013 deadline is approaching for all swap counterparties (including hedge funds) to obtain a legal entity identifier (LEI), currently known as a CFTC Interim Compliant Identifier or “CICI.” Counterparties that have adhered to the ISDA Dodd-Frank Protocol will have already obtained a CICI as part of…

Client Alerts | March 31, 2013 | Securities and Corporate Finance

On March 5, 2013, the U.S. District Court for the Northern District of Texas denied Mark Cuban’s motion to dismiss a civil enforcement action brought by the SEC for insider trading. The enforcement action against Mr. Cuban, originally filed in 2008, accused him of selling his shares of Mamma.com while in possession of material, non-public…

Client Alerts | March 7, 2013 | Securities and Corporate Finance

This update is a reminder that the May 1, 2013 deadline to adhere to ISDA August 2012 Dodd Frank Protocol (the “Protocol”) is approaching. To continue trading swaps, all end users (e.g., hedge funds, private equity funds and commercial end users) will need to adhere to the Protocol. As of May 1, 2013, Swap Dealers…

Client Alerts | February 28, 2013 | Securities and Corporate Finance | Hedge Funds

Kleinberg Kaplan will participate in a study of potential Bankruptcy Code reform. The American Bankruptcy Institute has formed a commission to study and propose reforms to Chapter 11 of the Bankruptcy Code that will better balance the goals of reorganization of business debtors, preservation of jobs and maximization of asset values for the benefit of…

Client Alerts | December 31, 2012

On November 29, 2012, the Commodity Futures Trading Commission (“CFTC”) announced that it will provide temporary no-action relief for operators of certain funds-of-funds (“FOF”) from the CFTC’s requirements for registration of Commodity Pool Operators (“CPO”). The CFTC recognized that absent such relief, FOF operators may be required to register with the CFTC as CPOs by…

Client Alerts | December 18, 2012 | Securities and Corporate Finance | Hedge Funds

On December 18, 2012, the U.S. Commodity Futures Trading Commission (the “CFTC”) extended the compliance dates for many of its business conduct rules with which “Swap Dealers” and “Major Swap Participants” will be required to comply. Consequently, end-users (e.g., hedge funds, private equity funds and commercial end-users) will have until May 1, 2013 to adhere…

Client Alerts | December 17, 2012 | Securities and Corporate Finance | Hedge Funds

On November 16, 2012, the U.S. Department of the Treasury issued a final determination that exempts FX Swaps and FX Forwards (as defined below) from the definition of “swap” under the Commodity Exchange Act (the “Exemption”). Practical Implications for Hedge Fund Managers As a result of the Exemption, FX Forwards and FX Swaps will generally…

Client Alerts | December 6, 2012 | Securities and Corporate Finance | Hedge Funds

The Commodity Futures Trading Commission (the “CFTC”) and the Securities Exchange Commission (the “SEC” and together with the CFTC, the Commissions”), in consultation with the Board of Governors of the Federal Reserve System, have jointly adopted final rules and interpretations (the “Swap Rules”), pursuant to Section 721 of the Dodd-Frank Wall Street Reform and Consumer…

Client Alerts | November 19, 2012 | Securities and Corporate Finance | Hedge Funds