Davis Polk & Wardwell LLP - Crowley, John

General Electric Capital Corporation $1 Billion Preferred Stock Offering

Mon, 03 Jun 2013 05:00:00 GMT

Davis Polk advised Barclays Capital Inc., Citigroup Global Markets Inc., Goldman, Sachs & Co., J.P. Morgan Securities LLC, Merrill Lynch, Pierce, Fenner & Smith Incorporated and Morgan Stanley & Co. LLC as joint book-running managers in connection with the public offering of 10,000 shares of fixed-to-floating-rate non-cumulative perpetual preferred stock, Series C by General Electric Capital Corporation (“GECC”).

Wesco Aircraft Holdings, Inc. Secondary Offering

Wed, 29 May 2013 05:00:00 GMT

Davis Polk advised Barclays Capital Inc. and J.P. Morgan Securities LLC as representatives of the several underwriters in connection with the secondary offering of 17,250,000 shares of common stock of Wesco Aircraft Holdings, Inc. sold by a selling stockholder, an affiliate of the Carlyle Group, for an aggregate price to the public of $276 million.

Aon plc $250 Million Notes Offering

Fri, 24 May 2013 05:00:00 GMT

Davis Polk advised Morgan Stanley & Co. LLC and Goldman, Sachs & Co. in connection with an SEC-registered offering by Aon plc of $250 million aggregate principal amount of 4.45% senior notes due 2043.

Investment Management Regulatory Update

Thu, 16 May 2013 05:00:00 GMT

SEC Rules and Regulations

SEC Staff Responds to Questions About Form PF
SEC Requests Information to Inform Consideration of Uniform Fiduciary Standard for Broker-Dealers and Investment Advisers

Industry Update

SEC Official Discusses Broker-Dealer Registration Issues for Private Fund Advisers
NFA Amends Rules to Simplify Reporting Requirements for CPO and CTA Members

Litigation

SEC Charges Former Public Company Employee in Expert-Network Insider Trading Case
SEC Charges Mutual Fund Directors and Service Providers for Deficiencies Relating to Investment Advisory Contract Approvals

The SEC’s Northern Lights Enforcement Action: Implications For Fund Directors

Mon, 13 May 2013 05:00:00 GMT

On May 2, 2013, the Securities and Exchange Commission (the “SEC”) settled charges that the five trustees (the “Trustees”) of two registered series trusts (the “Trusts”), the Trusts’ CCO-service provider, Northern Lights Compliance Services (“NLCS”), and the Trusts’ fund administrator, Gemini Fund Services, LLC (“GFS”) violated the Investment Company Act of 1940 (the “Investment Company Act”) in 2009 and 2010. The charges against the Trustees arose from (i) the Trusts’ disclosure to investors regarding the Trustees’ approval of investment advisory contracts and (ii) the Trustees’ approval of compliance manuals of investment advisers to the Trusts. Although this action did not result in the imposition of a monetary penalty on the Trustees, the Trustees consented to the entry of an SEC cease-and-desist order against them. The inclusion of the Trustees in this action highlights the SEC’s apparent newfound willingness to bring enforcement actions against registered fund directors and may also be a warning to other directors.

Cobalt International Energy, Inc. $1.3 Billion Secondary Offering

Fri, 10 May 2013 05:00:00 GMT

Davis Polk advised Cobalt International Energy, Inc. (Cobalt) in connection with an SEC-registered secondary offering of 50,000,000 shares of common stock of Cobalt sold by certain selling stockholders for an aggregate price of approximately $1.3 billion.

Investment Management Regulatory Update

Mon, 29 Apr 2013 05:00:00 GMT

SEC Rules and Regulations

CFTC and SEC Adopt Identity Theft Rules
SEC Staff Responds to Inquiries About Filing Requirements for Certain Electronic Communications

Investment Management Regulatory Update

Mon, 25 Mar 2013 05:00:00 GMT

SEC Rules and Regulations

SEC Staff Responds to Questions About Form PF

Industry Update

SEC Issues Risk Alert Identifying Significant Deficiencies in Compliance with the Custody Rule
SEC’s National Examination Program Releases its Examination Priorities for 2013
NFA Amendment Clarifies Rule Prohibiting Loans by Commodity Pools to CPOs '

Litigation

Supreme Court Overturns Second Circuit Ruling and Confirms that the Statute of Limitations for SEC Penalty Claims Begins when the Fraud Occurs
SEC Charges Hedge Fund Adviser with Fraudulently Raising Capital by Misrepresenting a Fund’s Structure to Investors
FINRA Orders Broker-Dealer to Pay more than $11 Million in Restitution and Fines for Late Pricing of Paper Mutual Fund Orders

Kennedy-Wilson Holdings, Inc. Common Stock Offering

Wed, 20 Mar 2013 05:00:00 GMT

Davis Polk advised Merrill Lynch, Pierce, Fenner & Smith Incorporated, Deutsche Bank Securities Inc. and Morgan Stanley & Co. LLC as representatives of the several underwriters in connection with an SEC-registered follow-on offering by Kennedy-Wilson Holdings, Inc. of 9,000,000 shares of Kennedy-Wilson’s common stock.

Investment Management Regulatory Update

Wed, 27 Feb 2013 06:00:00 GMT

SEC Rules and Regulations

SEC Issues Guidance on New Iran Disclosure Requirements
SEC Extends No-Action Relief to Broker-Dealers Who Rely on Registered Investment Advisers to Perform Customer Identification Program Obligations

Industry Update

European Commission Adopts AIFMD Level 2 Regulations
FinCEN Extends FBAR Filing Deadline for Certain Employees and Officers
SEC Official Discusses Enforcement Priorities in the Private Fund Space
SEC Expected to Move Forward with Uniform Fiduciary Standard

Litigation

First Circuit Considers Current and Prospective Business Relationships When Evaluating Independence of Fund Directors in Shareholder Derivative Cases

Aetna, Inc. and Vitality Re IV Limited $150 Million Reinsurance Transaction

Wed, 23 Jan 2013 06:00:00 GMT

Davis Polk advised Aetna, Inc., two wholly owned subsidiaries of Aetna (Aetna Life Insurance Company and Health Re, Inc., a special-purpose captive finance subsidiary), and Vitality Re IV Limited (Vitality IV), a Cayman Islands exempted company licensed as a Class C insurer, in connection with a $150 million reinsurance transaction.

Investment Management Regulatory Update

Tue, 22 Jan 2013 06:00:00 GMT

SEC Rules and Regulations

SEC Lifts Moratorium on Approving Actively Managed ETFs That Invest in Derivatives
SEC Extends Temporary Rule 206(3)-3T Regarding Principal Transactions with Certain Advisory Clients

Industry Update

Annual Affirmation Requirement for Certain Exempt CPOs and CTAs
Bill to Merge SEC and CFTC Introduced in the House of Representatives

Litigation

District Court Dismisses ICI and Chamber of Commerce Challenge to CFTC Amendments Affecting Registered Investment Companies
SEC Settles Charges Against a Business Development Company and Its Executives for Overvaluing Assets and for Internal Control Failures
SEC Settles Charges Against Investment Adviser for Misleading Use of Hypothetical Back-Tested Performance Models

Investment Management Regulatory Update

Thu, 20 Dec 2012 06:00:00 GMT

SEC Rules and Regulations

SEC Staff Responds to Questions About Form PF
SEC Releases Guidance on Advisers Act Exemption for CFTC-Registered Investment Advisers that Advise Private Funds
SEC Adopts New Credit Quality Standard for BIDCOs Relying on Section 6(a)(5) of the Investment Company Act
SEC Announces List of Federal Securities Law Rules to be Reviewed Over the Next 12 Months

Industry Update

CFTC Grants Registration Relief for Family Offices, Funds of Funds and Business Development Companies
FSOC Issues Proposed Recommendations for Money Market Mutual Fund Reform
Director of the OCIE Speaks on the Significance of Conflicts of Interest and Risk Governance
FINRA Announces Arbitration for Investment Advisers that are not FINRA-Regulated Firms

Litigation

Court Ruling Addresses Pension “Controlled Group” Liability for Private Equity Funds
Jury Issues Mixed Verdict in Reserve Primary Fund Trial
SEC Charges Mutual Fund Directors for Inadequate Valuation Oversight

SEC Charges Mutual Fund Directors for Inadequate Valuation Oversight

Mon, 17 Dec 2012 06:00:00 GMT

On December 10, 2012, the Securities and Exchange Commission (the “SEC”) charged eight former directors (the “Directors”) of five Morgan Asset Management (“MAM”) registered investment companies (“RICs”) with securities laws violations for their role in valuing the RICs’ securities from March 2007 through August 2007. Section 2(a)(41)(B) of the Investment Company Act of 1940, as amended, requires that when market quotations are not readily available in respect of securities held by RICs, the securities must be given a fair value as determined in good faith by the RICs’ boards of directors. Pursuant to SEC guidance, boards of directors are permitted to delegate their responsibility for calculating fair values, pursuant to board-approved policies and procedures. According to the SEC’s Order Instituting Public Administrative and Cease-And-Desist Proceedings (the “Order”), RICs managed by MAM, which included one open-end RIC that had three series and four closed-end RICs, had approximately $3.85 billion in assets under management. The RICs’ assets included mortgage-backed securities and other types of structured products. According to the Order, the Directors delegated their asset pricing duties to MAM and, pursuant to the RICs’ policies and procedures (the “Valuation Procedures”), the MAM valuation committee (the “Valuation Committee”) determined the fair value of securities that did not have available quotations. According to the Order, fair-valued securities made up more than 60 percent of the net asset value for most of the RICs.

McKesson Corporation $900 Million Notes Offering

Tue, 04 Dec 2012 06:00:00 GMT

Davis Polk advised underwriters represented by J.P. Morgan Securities LLC and Merrill Lynch, Pierce, Fenner & Smith Incorporated in connection with the offering of $900 million aggregate principal amount of notes issued by McKesson Corporation.

Investment Management Regulatory Update

Tue, 27 Nov 2012 06:00:00 GMT

SEC Rules and Regulations

SEC Proposes Extension of Temporary Rule 206(3)-3T Regarding Principal Transactions with Certain Advisory Clients

Industry Update

SEC Announces Presence Exams of Newly Registered Investment Advisers
Additional Guidance Extends FATCA Deadlines and Expands the Scope of “Grandfathered” Obligations
Investor Advisory Committee Submits Recommendations to the SEC on the SEC’s Proposal to Eliminate the General Solicitation Ban
SEC Staff Issues Report on Authority to Enforce the Anti-Evasion Rule Under Section 12(g) of the Exchange Act
NFA Waives Series 3 Proficiency Exam Requirement for Associated Persons of Certain Registered CPOs and CTAs
Speech by SEC Chairman on New Technology Initiatives to Detect Suspicious Trading

Litigation

SEC Charges Hedge

Investment Management Regulatory Update

Wed, 17 Oct 2012 05:00:00 GMT

SEC Rules and Regulations

SEC Grants No-Action Relief to Exclude Tax Blocker from Definition of Investment Company
SEC Grants No-Action Relief from Surprise Examinations to Investment Advisers to 529 Plans

Industry Update

CFTC Provides Temporary Registration Relief to CPOs and CTAs that are Required to Register Solely Because of their Swap Activities; NFA Issues Notice that CPOs Relying on Rule 4.13(a)(4) Can Now Pre-file a Rule 4.7 Exemption
FINRA Rule 5123 Regarding Filing Obligations in Private Placements to Take Effect on December 3, 2012

Litigation

SEC Finds “In-Kind” Contributions Violate Pay-to-Play Rules
SEC Settles Charges Against Investment Advisers for Failure to Disclose Revenue Sharing Arrangement and Other Conflicts of Interest
Supreme Court to Address the Statute of Limitations for SEC Penalty Claims

General Electric Company $7 Billion Notes Offering

Tue, 09 Oct 2012 05:00:00 GMT

Davis Polk advised Barclays Capital Inc., Citigroup Global Markets Inc., Deutsche Bank Securities Inc., Goldman, Sachs & Co., J.P. Morgan Securities LLC and Morgan Stanley & Co. LLC as representatives in connection with the public offering of $2 billion aggregate principal amount of 0.85% notes due 2015, $3 billion aggregate principal amount of 2.7% notes due 2022 and $2 billion aggregate principal amount of 4.125% notes due 2042 by General Electric Company (GE).

Securities Offerings During Blackout Periods and Following a Quarter-End: What You Need to Know

Mon, 01 Oct 2012 05:00:00 GMT

Many companies voluntarily impose a “blackout period” beginning around the time a quarter ends and continuing through the quarter’s earnings announcement or subsequent 10-Q or 10-K filing. Although the company’s directors and officers are therefore barred by company policy from trading during this period, it may nevertheless be possible for the company or its major stockholders to complete a securities offering on a public or private basis. The existence of a company-imposed blackout period does not, as a legal matter, prevent the company or a major stockholder from selling securities as long as the company is able to meet its duty of disclosure.

Investment Management Regulatory Update

Wed, 26 Sep 2012 05:00:00 GMT

SEC Rules and Regulations

SEC Issues Proposal to Eliminate General Solicitation Ban
SEC Staff Responds to a Question About Preserving Client Anonymity on Item 7.B. of Form ADV

Industry Update

CFTC Issues Guidance on CPO/CTA Registration and Compliance Obligations
Statement by SEC Chairman on Money Market Reform
SEC Announces its First Award under its Whistleblower Program
House Passes Bill Seeking to Tighten SEC and CFTC Cost-Benefit Analysis

Litigation

Second Circuit Relaxes Standard to Prove Aiding and Abetting Liability in SEC Enforcement Actions
SEC Announces Deferred Prosecution Agreement with Investment Fund

Ingredion Incorporated $300 Million Senior Notes Offering

Thu, 20 Sep 2012 05:00:00 GMT

Davis Polk advised J.P. Morgan Securities LLC, Citigroup Global Markets Inc. and Merrill Lynch, Pierce Fenner & Smith Incorporated as joint book-running managers on a public offering by Ingredion Incorporated of $300 million aggregate principal amount of 1.8% senior notes due 2017.

SEC Issues Proposal to Eliminate General Solicitation Ban as Mandated by the JOBS Act

Tue, 04 Sep 2012 05:00:00 GMT

On August 29, 2012, the Securities and Exchange Commission (“SEC”) issued a proposal to permit widespread advertising and other forms of “general solicitation” in private offerings made in reliance on Rule 506 of Regulation D or Rule 144A of the Securities Act of 1933, so long as the purchasers in the offering are accredited investors (“AIs”) (in Rule 506 offerings) or qualified institutional buyers (“QIBs”) (in Rule 144A offerings). The proposal is mandated by Section 201(a) of the Jumpstart Our Business Startups Act (the “JOBS Act”) but, unlike other portions of the JOBS Act, the proposal would apply to all issuers, not just emerging growth companies.

Laboratory Corporation of America Holdings $1 Billion Senior Notes Offering

Wed, 29 Aug 2012 05:00:00 GMT

Davis Polk advised Credit Suisse Securities (USA) LLC and Merrill Lynch, Pierce, Fenner & Smith Incorporated as underwriters on a public offering by Laboratory Corporation of America Holdings (LabCorp) of $500 million aggregate principal amount of 2.20% senior notes due 2017 and $500 million aggregate principal amount of 3.75% senior notes due 2022.

Investment Management Regulatory Update

Wed, 22 Aug 2012 05:00:00 GMT

On July 19, 2012, the Division of Investment Management of the Securities and Exchange Commission (the “SEC”) issued additional responses (the “Responses”) to frequently asked questions regarding Form PF. Investment advisers registered or required to register with the SEC under the Investment Advisers Act of 1940 (the “Advisers Act”) that advise one or more private funds (i.e., 3(c)(1) or 3(c)(7) funds) and that have at least $150 million in private fund assets under management (“private fund advisers”) are required to file Form PF with the SEC for the purpose of reporting systemic risk information to the SEC. Additionally, private fund advisers that are also registered with the Commodity Futures Trading Commission (the “CFTC”) as commodity pool operators (“CPOs”) and commodity trading advisors (“CTAs”) and are required to file Form PF under the Advisers Act must file Form PF with the SEC to satisfy certain CFTC filing requirements with respect to their commodity pools that are private funds. Such CPOs and CTAs may file Form PF with the SEC to satisfy certain CFTC filing requirements with respect to their commodity pools that are not private funds.

Kennedy-Wilson Holdings, Inc. Common Stock Offering

Tue, 24 Jul 2012 05:00:00 GMT

Davis Polk advised Merrill Lynch, Pierce, Fenner & Smith Incorporated and Deutsche Bank Securities Inc. as representatives of the several underwriters and joint book-running managers of a registered public offering by Kennedy-Wilson Holdings, Inc. of 8,625,000 shares of Kennedy-Wilson’s common stock, which included 1,125,000 shares that the underwriters purchased pursuant to an additional share purchase option. The net proceeds from the offering totaled approximately $106.3 million.

CFTC Addresses Compliance Dates for CPO/CTA Registration; Swap Definitions Finalized; CFTC Provides Cross-Border Guidance

Thu, 19 Jul 2012 05:00:00 GMT

On July 10, 2012, the U.S. Commodity Futures Trading Commission (the “CFTC”) issued a no-action letter that will extend until December 31, 2012 relief from registration as a commodity pool operator (“CPO”) or commodity trading advisor (“CTA”) that was previously available to investment managers. The no-action letter, which was made public on July 13, 2012, comes in the wake of the adoption by the CFTC and SEC of final rules defining the terms “swap,” “security-based swap,” and “mixed swap,” which trigger numerous compliance dates under rules adopted pursuant to Title VII of the Dodd-Frank Act. Both the no-action letter and the definition rules will have significant consequences for investment managers whose funds trade in swaps, futures or commodity options (collectively, “commodity interests”) and therefore may be “commodity pools” under the CFTC rules.

Investment Management Regulatory Update

Mon, 16 Jul 2012 05:00:00 GMT

On June 8, 2012 and June 29, 2012, the Division of Investment Management of the Securities and Exchange Commission (the “SEC”) issued responses (the “Responses”) to frequently asked questions regarding Form PF. Investment advisers registered or required to register with the SEC under the Investment Advisers Act of 1940 (the “Advisers Act”) that advise one or more private funds (i.e., 3(c)(1) or 3(c)(7) funds) and that have at least $150 million in private fund assets under management (“private fund advisers”) are required to file Form PF with the SEC for the purpose of reporting systemic risk information to the SEC. Additionally, private fund advisers that are also registered with the Commodity Futures Trading Commission (the “CFTC”) as commodity pool operators (“CPOs”) and commodity trading advisors (“CTAs”) and are required to file Form PF under the Advisers Act must file Form PF with the SEC to satisfy certain CFTC filing requirements with respect to their commodity pools that are private funds. Such CPOs and CTAs may file Form PF with the SEC to satisfy certain CFTC filing requirements with respect to their commodity pools that are not private funds.

Caterpillar Inc. $1.5 Billion Notes Offering

Tue, 26 Jun 2012 05:00:00 GMT

Davis Polk advised Citigroup Global Markets Inc., J.P. Morgan Securities LLC and Merrill Lynch, Pierce, Fenner & Smith Incorporated as joint book-running managers and representatives of the underwriters on an SEC-registered offering by Caterpillar Inc. of $1.5 billion aggregate principal amount of notes.

Investment Management Regulatory Update

Tue, 19 Jun 2012 05:00:00 GMT

On June 8, 2012, the Division of Investment Management of the Securities and Exchange Commission (the “SEC”) issued responses (the “Responses”) to two questions regarding reporting on Part 1A of Form ADV. The first question related to Item 1.O of Form ADV, which requires an investment adviser to report whether it had $1 billion or more in assets on its balance sheet on the last day of its most recent fiscal year. The Responses clarify that “assets” refers to the investment adviser’s total assets and not the assets managed on behalf of clients. Thus, for example, an investment adviser that has $5 billion in regulatory assets under management but only $300 million in total assets on its own balance sheet for the most recent fiscal year would answer “no” to Item 1.O.

Medallion Financial Corp. Follow-On Common Stock Offering

Mon, 21 May 2012 05:00:00 GMT

Davis Polk advised Morgan Stanley & Co. LLC, Stifel, Nicolaus & Company, Incorporated and Sandler O’Neill & Partners, L.P. as joint book-running managers in connection with an SEC-registered follow-on offering of 3,500,000 shares of common stock of Medallion Financial Corp. The gross proceeds from the offering were approximately $35.4 million. Medallion Financial Corp.’s common stock is traded on the Nasdaq Global Select Market under the symbol “TAXI.”

Investment Management Regulatory Update

Thu, 17 May 2012 05:00:00 GMT

On April 11, 2012, prior to proposing rules that are required to implement certain aspects of the Jumpstart Our Business Startups Act (the “JOBS Act”), the Securities and Exchange Commission (the “SEC”) announced that it will begin accepting public comments on the JOBS Act, which was enacted on April 5, 2012. According to the SEC’s press release, although generally required by law to establish a public comment period when new rules (or rule amendments) are proposed, the SEC has decided to allow public comment before JOBS Act rules are proposed, a process that the SEC first utilized with the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (the “Dodd-Frank Act”). The comments will be publicly available, as will information about JOBS Act meetings with interested persons, according to the SEC.

Wabash National Corporation $150 Million Convertible Senior Notes Offering

Mon, 23 Apr 2012 05:00:00 GMT

Davis Polk & Wardwell LLP advised Morgan Stanley & Co. LLC and Wells Fargo Securities, LLC as joint book-running managers in connection with an SEC-registered offering by Wabash National Corporation of $150 million aggregate principal amount of its 3.375% convertible senior notes due 2018.

Investment Management Regulatory Update

Thu, 19 Apr 2012 05:00:00 GMT

Congress Passes the JOBS Act

Tue, 27 Mar 2012 05:00:00 GMT

By a vote of 380 to 41, the House of Representatives today passed the Jumpstart Our Business Startups ("JOBS") Act, without further amendment. The JOBS Act will now be sent to President Obama. The White House has previously voiced support for the JOBS Act and the President's signature is expected.

Senate Passes Legislation To Raise the 500 Shareholder Threshold for SEC Registration and To Relax General Solicitation Prohibition in Reg D Offerings

Fri, 23 Mar 2012 05:00:00 GMT

Yesterday, by a vote of 73 to 26, the U.S. Senate passed the Jumpstart Our Business Startups Act, which was approved by the U.S. House of Representatives on March 8, 2012, but voted to amend the so-called “crowdfunding” section of the House-passed bill (as amended, the “JOBS Act”). Because of the crowdfunding amendment, the JOBS Act will now return to the House (a House vote is expected early next week) and ultimately, once the House and Senate reach agreement on a single version, will need to be signed into law by President Obama. If enacted, the JOBS Act would, among other things, (i) raise the equity holder threshold in Section 12(g) of the Securities Exchange Act of 1934 (the “Exchange Act”) that triggers public company reporting and (ii) relax the general solicitation and general advertising prohibition for offerings made pursuant to Rule 506 of Regulation D of the Securities Act of 1933 (the “Securities Act”). These amendments, both of which address issues that have been the focus of recent congressional and regulatory attention, would introduce significant and beneficial changes to the regulations governing the offering processes for private funds

Investment Management Regulatory Update

Wed, 21 Mar 2012 05:00:00 GMT

On February 15, 2012, the Securities and Exchange Commission (the “SEC”) issued a final rule release (the “Release”) adopting amendments (the “Amendments”) to Rule 205-3 under the Investment Advisers Act of 1940 (the “Advisers Act”), which provides an exemption from the prohibition in Section 205(a)(1) of the Advisers Act against registered investment advisers entering into any investment advisory contract that charges a performance fee. Under Rule 205-3, an adviser is permitted to charge a performance fee in an investment advisory contract if the client that is a party to such contract meets the definition of “qualified client.”

CFTC Adopts Amendments to Registration Exemptions for CPOs and CTAs and Proposes Harmonization Rules for Registered Fund CPOs

Thu, 23 Feb 2012 06:00:00 GMT

On February 9, 2012, the Commodity Futures Trading Commission (the “CFTC”) adopted final rule amendments (the “Final Rules”) relating to the registration of commodity pool operators (“CPOs”) under the Commodity Exchange Act (the “CEA”). The amendments, initially proposed by the CFTC in a February 2011 release (the “Proposing Release”), will significantly narrow the relief from CPO registration currently available for advisers to, and sponsors of, private funds and investment companies registered under the Investment Company Act of 1940 (“RICs”). The Final Rules will become effective 60 days after the publication of the release adopting the rules (the “Adopting Release”) in the Federal Register, with compliance dates as discussed further herein.

Investment Management Regulatory Update

Tue, 21 Feb 2012 06:00:00 GMT

On January 19, 2012, the staff of the SEC’s Division of Investment Management released responses (“Responses”) to frequently asked questions about Rule 202(a)(11)(G)-1, the so-called “family office rule,” under the Investment Advisers Act of 1940 (the “Advisers Act”). Effective August 29, 2011, the family office rule defines the term “family office” for purposes of Section 202(a)(11)(G) of the Advisers Act, which was enacted as part of the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”) and excludes “family offices” from the definition of an investment adviser.

Investment Management Regulatory Update

Mon, 23 Jan 2012 06:00:00 GMT

SEC Rules and Regulations

SEC Amends Net Worth Standard for Individual Accredited Investors

SEC Schapiro Seeks Authority to Impose Larger Penalties for Securities Law Violations

Industry Update

Federal Reserve Issues Proposed Rules on Enhanced Prudential Standards for Large Bank Holding Companies and Systemically Important Nonbank Financial Companies

Litigation

New Initiative to Evaluate Hedge Fund Returns Leads to Four SEC Enforcement Actions

SEC Settles Charges Against Three Investment Advisers for Compliance Failures

Second Circuit Upholds the Constitutionality of New York City "Pay-to-Play" Law

Investment Management Regulatory Update

Wed, 07 Dec 2011 06:00:00 GMT

Industry Update
Treasury Department To Develop Anti-Money Laundering Rules for Investment Advisers
Proposed Treasury Regulations Clarify U.S. Taxation of Investments by Foreign Governments
SEC Grants No-Action Relief to Mutual Fund Proposing to Transfer Assets to Affiliated Liquidating Trust

Litigation
Federal District Court Imposes $92.8 million Civil Penalty on Hedge Fund Manager Raj Rajaratnam
SEC Settles with Advisory Firm for Improper Fees Paid to Mutual Fund Sub-Adviser
FINRA Fines Brokerage Firm for Unsuitable Sales of UITs and Floating-Rate Loan Funds

Investment Management Regulatory Update

Fri, 18 Nov 2011 06:00:00 GMT

SEC Rules and Regulations
SEC Adopts Private Fund Systemic Risk Reporting Rule
SEC Proposes Rules on the Registration of Security-Based Swap Dealers and Major Security-Based Swap Participants

Industry Update
FSOC Issues Proposed Rules on Designation of Systemically Important Nonbank Financial Companies
CFTC Adopts Final Position Limits for 28 Physical Commodity Futures, Options and Swaps
FINRA Proposes New Rule 5123 Regarding Disclosure and Filing Obligations in Private Placements in Which FINRA Members Participate
FINRA Releases Regulatory Notice on ETF Advertising Regulation

Litigation
SEC Charges Former Private Equity Firm Partner with Misappropriation of Advisory Firm’s Investment Opportunity

Kennedy-Wilson Holdings, Inc. Common Stock Offering

Wed, 16 Nov 2011 06:00:00 GMT

Governance Practices for IPO Companies: A Davis Polk Survey

Mon, 31 Oct 2011 05:00:00 GMT

While the U.S. IPO market has slowed down in recent months, Davis Polk’s pipeline of deals in progress is strong, leading us to believe that there will be an uptick in IPO transactions as the market stabilizes. Considering that there continues to be growing pressure on larger companies to update their corporate governance provisions in response to both government regulations and pressure from shareholders and advisory groups, we thought this would be a good time to review the corporate governance practices at the time of the IPO to see if any of these practices had trickled down to IPO companies. Our survey is an update of our October 2009 survey and focuses on corporate governance at the time of the IPO for the largest 50 U.S. company IPOs from January 2009 through August 2011. The results are presented separately excluding controlled companies in recognition of their different governance characteristics.

SEC Approves Private Fund Systemic Risk Reporting

Thu, 27 Oct 2011 05:00:00 GMT

On October 26, 2011, the Securities and Exchange Commission (the “SEC”) voted unanimously to adopt a new rule under the U.S. Investment Advisers Act of 1940 (the “Advisers Act”) that requires SEC-registered investment advisers that advise one or more private funds (i.e., 3(c)(1) or 3(c)(7) funds) to file Form PF with the SEC for the purpose of reporting systemic risk information. The SEC and the CFTC (the “Commissions”) jointly proposed Form PF on January 26, 2011 to implement certain provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”). Please see the February 14, 2011 Investment Management Regulatory Update for a discussion of the proposed rules regarding Form PF. The final rule has not yet been released, but the SEC issued a press release and fact sheet describing several important elements of the new rule. The following discussion of the new rule is based on the SEC’s press release and fact sheet.

GE Capital $3 Billion Medium-Term Notes Offering

Tue, 18 Oct 2011 05:00:00 GMT

Davis Polk advised Barclays Capital Inc., Citigroup Global Markets Inc., Credit Suisse Securities (USA) LLC, Deutsche Bank Securities Inc., J.P. Morgan Securities LLC and Merrill Lynch, Pierce, Fenner & Smith Incorporated as lead managers for General Electric Capital Corporation (GE Capital) in connection with an SEC-registered debt shelf takedown offering by GE Capital of $1.25 billion of its 3.35% senior unsecured global medium-term notes, series A due 2016 and of $1.75 billion of its 4.65% senior unsecured global medium-term notes, series A due 2021, under its U.S. Medium-Term Notes Program.

Investment Management Regulatory Update

Fri, 14 Oct 2011 05:00:00 GMT

Industry Update
* Regulators Release Proposed Regulations Implementing the Volcker Rule
* SEC Grants No Action Relief from Pay-to-Play Recordkeeping Requirements
* SEC Plans to Consider Raising the 500 Shareholder Threshold for SEC Registration

Litigation
*SEC Charges Co-Founder of AXA Rosenberg Group, LLC with Securities Fraud for Concealing Quantitative Investment Modeling Error
*SEC Charges Former Goldman Employee and His Father in First Ever ETF Insider Trading Enforcement Action
*Hedge Fund Directors Under Scrutiny by Cayman Court

Joy Global Inc. $500 Million Acquisition Financing

Wed, 12 Oct 2011 05:00:00 GMT

Davis Polk advised Goldman, Sachs & Co., J.P. Morgan Securities LLC and Merrill Lynch, Pierce, Fenner & Smith Incorporated as joint book-running managers and representatives of the underwriters on an SEC-registered offering by Joy Global Inc. of $500 million aggregate principal amount of its 5.125% senior notes due 2021.

Investment Management Regulatory Update

Mon, 19 Sep 2011 05:00:00 GMT

On August 31, 2011, the SEC issued a concept release (the “Derivatives Concept Release”) soliciting public comment on the use of derivatives by registered investment companies under the Investment Company Act of 1940 (the “Investment Company Act”). The SEC is seeking public comment to assist its review of the use of derivatives by management investment companies registered under the Investment Company Act and companies that have elected to be treated as business development companies under the Investment Company Act (collectively, “funds”), with the goal of evaluating whether the regulatory framework, as it applies to funds’ use of derivatives, continues to fulfill the purposes and policies underlying the Investment Company Act and is consistent with investor protection. The issuance of the concept release is part of an ongoing review by the SEC of funds’ use of derivatives under the Investment Company Act. For a discussion of other recent SEC reviews, including that of derivatives-related disclosure by investment companies, see the May 8, 2009, April 6, 2010, May 10, 2010 and August 16, 2010 Investment Management Regulatory Updates.

SEC Seeks Public Comment on Mutual Fund Derivatives Use and Asset-Backed Issuers and Mortgage-Related Pools under the Investment Company Act

Fri, 02 Sep 2011 05:00:00 GMT

On August 31, 2011, the SEC issued (i) a concept release (the “Derivatives Concept Release”) soliciting public comment on the use of derivatives by registered investment companies under the Investment Company Act of 1940 (the “ICA”); (ii) an advance notice of proposed rulemaking on the treatment of asset-backed issuers under the ICA (the “Proposed Rule”); and (iii) a concept release (the “Mortgage Concept Release”) seeking public comment regarding the ICA status of companies engaged in the business of acquiring mortgages and mortgage-related instruments.

Investment Management Regulatory Update

Fri, 12 Aug 2011 05:00:00 GMT

SEC Rules and Regulations
SEC Adopts Large Trader Reporting Rule

Industry Update
SEC Issues No-Action Letter Regarding Compliance with the Independent Accountant Requirements Under the Custody Rule
SEC Grants No-Action Relief from Advisers Act Registration to Wholly Owned Subsidiary that Solely Advises Foreign Funds in Which Parent is Sole Investor

Litigation
SEC Settles with Dually Registered Broker-Dealer and Investment Adviser over Inadequate Insider Trading Policies
D.C. Circuit Vacates SEC Rule on Shareholder Access to Proxy Materials
SEC Settles with Hedge Fund Manager over Short Sale Violations

Investment Management Regulatory Update

Wed, 13 Jul 2011 05:00:00 GMT

On July 12, 2011, the SEC issued an order (the “Order”) that raises the dollar amount thresholds in the assets-under-management and net worth tests in the definition of “qualified client” under rule 205-3 under the Investment Advisers Act of 1940 (the “Advisers Act”). Pursuant to the Order, the assets-under-management and net worth prongs of the definition of “qualified client” will be adjusted from $750,000 to $1,000,000 and $1,500,000 to $2,000,000, respectively. The SEC previously indicated on May 10, 2011 that it would issue the Order in a rule proposal regarding proposed amendments to rule 205-3, as discussed in the May 17, 2011 Investment Management Regulatory Update.On July 12, 2011, the SEC issued an order (the “Order”) that raises the dollar amount thresholds in the assets-under-management and net worth tests in the definition of “qualified client” under rule 205-3 under the Investment Advisers Act of 1940 (the “Advisers Act”). Pursuant to the Order, the assets-under-management and net worth prongs of the definition of “qualified client” will be adjusted from $750,000 to $1,000,000 and $1,500,000 to $2,000,000, respectively. The SEC previously indicated on May 10, 2011 that it would issue the Order in a rule proposal regarding proposed amendments to rule 205-3, as discussed in the May 17, 2011 Investment Management Regulatory Update.

SEC Issues Final Rules Implementing Dodd-Frank Amendments to the Investment Advisers Act of 1940

Wed, 29 Jun 2011 05:00:00 GMT

On June 22, 2011, the SEC issued final rules and rule amendments to implement provisions of Title IV of the Dodd-Frank Wall Street Reform and Consumer Protection Act that exempt certain advisers from registration under the Investment Advisers Act of 1940. Among other things, the final rules (i) define "venture capital fund" for the purposes of the new Advisers Act exemption for advisers to venture capital funds, (ii) exempt from registration certain private fund advisers with less than $150 million in assets under management in the United States and (iii) clarify the meaning of certain terms used in the new exemption for foreign private advisers.

Investment Management Regulatory Update

Fri, 10 Jun 2011 05:00:00 GMT

SEC Rules and Regulations
* SEC Proposes Rule on Disqualification of "Bad Actors" from Rule 506 Offerings

Industry Update
* FINRA Delays Implementation of Rule 5131(b) Prohibition on Spinning, Giving Fund Managers More Time to Collect Necessary Investor Information
* Treasury Extends First Reporting Date for Proposed Form SLT to September 30, 2011

* SEC Holds Roundtable on Money Market Funds and Systemic Risk

Litigation
* SEC Enters Into First-Ever Deferred Prosecution Agreement with Tenaris S.A. to Settle FCPA Violations

* FINRA Fines Wells Fargo Advisors $1 Million for Delays in Delivering Prospectuses and Reporting Required Information Regarding its Brokers

Investment Management Regulatory Update

Tue, 17 May 2011 05:00:00 GMT

SEC Rules and Regulations
* SEC Proposes Rule Adjusting Performance Fee Asset Thresholds in the Definition of “Qualified Client”

Industry Update
* Banking Regulators and the CFTC Propose Swap Margin and Capital Rules
* Massachusetts Plans to Regulate Expert-Network Firms
* Governor Cuomo Bans Elected Officials, Lobbyists and Placement Agents from NYCRF and “Pay-To-Play”
* International Financial Policymakers Warn of Financial Stability Risks Posed by ETFs

Litigation
* Fifth Circuit Affirms Dismissal of Hedge Fund Investor Suit in Connection with its Withdrawal Rights Following the Departure of a Key Person
* Court Rules an Investment Manager for a Fund Lacks Standing to Pursue Claims on the Fund’s Behalf

Dodd-Frank Act May Require New SEC Registration for Non-U.S. Advisers

Mon, 25 Apr 2011 05:00:00 GMT

The Dodd-Frank Act may require many currently unregistered non-U.S. investment advisers to register with the SEC as investment advisers, because the Act eliminates a registration exemption on which many non-U.S. advisers have traditionally relied. Although we expect the deadline to be extended, if it is not extended, these registrations will be required to be completed by July 21, 2011.

This memorandum describes the new registration requirement, as well as certain new, more limited exemptions from registration under the Investment Advisers Act of 1940 available after Dodd-Frank, some of which may be useful to a non-U.S. investment adviser.

Investment Management Regulatory Update

Fri, 15 Apr 2011 05:00:00 GMT

Breaking News on Dodd-Frank Private Adviser Registration Deadline
SEC to Consider Delaying Dodd-Frank Private Adviser Registration Deadline Until First Quarter 2012

SEC Rules and Regulations
SEC Proposes Amendments to Remove Credit Rating References to Certain Investment Company Act Rules and Forms

Industry Update
New Form SLT Reporting Requirements Applicable to Funds and Investment Managers Proposed by U.S. Department of Treasury

SEC’s Division of Investment Management Issues Responses to Questions Concerning Part 2 of Form ADV

SEC’s Division of Investment Management Answers Questions Concerning Pay-to-Play Rule

SEC to Bring Cases Against Mutual Funds for Inappropriate Fees

Litigation
SEC Charges Hedge Fund Manager with Securities Fraud for Misappropriating "Side Pocketed" Assets

Investment Management Regulatory Update

Tue, 15 Mar 2011 05:00:00 GMT

Investment Management Regulatory Update

Mon, 14 Feb 2011 06:00:00 GMT

On January 26, 2011, the SEC and the CFTC (the “Commissions”) jointly released proposed new rules under the Commodity Exchange Act and the Investment Advisers Act of 1940 (the “Advisers Act”) to implement certain provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”). The proposed SEC rule 204(b)-1 would require investment advisers registered or required to register with the SEC under the Advisers Act and that advise one or more private funds (i.e., 3(c)(1) or 3(c)(7) funds) (“private fund advisers”) to file Form PF with the SEC for the purposes of reporting systemic risk information to the SEC. Under proposed CFTC rule 4.27(d), private fund advisers that are also registered with the CFTC as commodity pool operators (“CPOs”) or commodity trading advisors (“CTAs”) would also file Form PF, in which case the filing would be a filing with both the SEC and CFTC.

Investment Management Regulatory Update

Thu, 13 Jan 2011 06:00:00 GMT

In this issue of the Investment Management Regulatory Update:

SEC Rules and Regulations - SEC Extends Expiration Date for Temporary Rule on Principal Trades with Certain Advisory Clients

Industry Update - President Obama Signs Into Law the Regulated Investment Company Modernization Act of 2010 - NASAA Proposes Model Rule for the Exemption of Private Fund Advisers from State Registration - SEC Extends No-Action Relief for an FCM that Custodies Assets for Registered Funds for Cleared CDS Transactions

Litigation - Recent New York “Pay-to-Play” Enforcement Actions

Investment Management Regulatory Update

Fri, 17 Dec 2010 06:00:00 GMT

On November 19, 2010, the SEC issued a release (the “Exemptions Release”) proposing rules to implement certain provisions of Title IV of the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”) that exempt certain advisers from registration under the Investment Advisers Act of 1940 (the “Advisers Act”).

SEC Issues Proposal Implementing Advisers Act Registration and Reporting Amendments Under the Dodd-Frank Act

Wed, 24 Nov 2010 06:00:00 GMT

On November 19, 2010, the SEC issued a release (the “Implementing Release”) in which it proposed rules and rule amendments, including various amendments to Form ADV, to implement certain provisions of Title IV of the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”) that amend the Investment Advisers Act of 1940 (the “Advisers Act”).

SEC Proposes Rules Implementing New Exemptions from Advisers Act Registration Under the Dodd-Frank Act

Wed, 24 Nov 2010 06:00:00 GMT

Investment Management Regulatory Update

Fri, 12 Nov 2010 06:00:00 GMT

Investment Management Regulatory Update

Tue, 12 Oct 2010 05:00:00 GMT

On October 5, 2010, President Obama signed into law legislation that repeals Section 929I of the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”), which had exempted the SEC, in certain instances, from requests for disclosure under the Freedom of Information Act (“FOIA”).

Investment Management Regulatory Update

Mon, 13 Sep 2010 05:00:00 GMT

Included in this issue:

SEC Rules and Regulations
SEC Votes to Adopt New Proxy Access Rules

Industry Update
Technical Corrections and Revisions to New York Law Governing Powers of Attorney Effective September 12, 2010
SEC Issues No-Action Letter Temporarily Relieving Money Market Funds from NRSRO Designation Obligations
SEC Announces the Expiration of Temporary Rule 206(3)-3T
ABA Task Force Completes Report on Fund Use of Leverage and Derivatives; SEC Hopes to Take Action by Year’s End
Securities Regulators Update Report on Best Practices for Firms Serving Senior Investors

Litigation
Second Circuit Upholds the Constitutionality of Connecticut's "Pay-to-Play" Law As It Relates to Contractors and their Families

Investment Management Regulatory Update

Mon, 16 Aug 2010 05:00:00 GMT

Investment Management Regulatory Update

Thu, 15 Jul 2010 05:00:00 GMT

Davis Polk Regulatory Implementation Slides

Fri, 09 Jul 2010 05:00:00 GMT

Summary of the Dodd-Frank Wall Street Reform and Consumer Protection Act, Passed by the House of Representatives on June 30, 2010

Fri, 09 Jul 2010 05:00:00 GMT

Investment Management Regulatory Update

Thu, 10 Jun 2010 05:00:00 GMT

Side-by-Side Comparison Chart – Key Senate and House Bill Issues

Wed, 02 Jun 2010 05:00:00 GMT

Summary of the Restoring American Financial Stability Act, Passed by the Senate on May 20, 2010

Sat, 22 May 2010 05:00:00 GMT

Investment Management Regulatory Update

Mon, 10 May 2010 05:00:00 GMT

SEC Proposes Large Trader Reporting System

Tue, 20 Apr 2010 05:00:00 GMT

Investment Management Regulatory Update

Tue, 06 Apr 2010 05:00:00 GMT

Summary of the March 15, 2010 Draft of the Restoring American Financial Stability Act, Introduced by Senator Christopher Dodd (D-CT)

Wed, 17 Mar 2010 05:00:00 GMT

Investment Management Regulatory Update

Tue, 09 Mar 2010 06:00:00 GMT

Investment Management Regulatory Update

Fri, 05 Feb 2010 06:00:00 GMT

Investment Management Regulatory Update

Thu, 07 Jan 2010 06:00:00 GMT

Investment Management Regulatory Update

Fri, 04 Dec 2009 06:00:00 GMT

Investment Management Regulatory Update

Wed, 11 Nov 2009 06:00:00 GMT

Investment Management Regulatory Update

Fri, 09 Oct 2009 05:00:00 GMT

Investment Management Regulatory Update

Thu, 03 Sep 2009 05:00:00 GMT

Investment Management Regulatory Update

Wed, 05 Aug 2009 05:00:00 GMT

Private Fund Investment Advisers Registration Act

Fri, 17 Jul 2009 05:00:00 GMT

Investment Management Regulatory Update

Wed, 01 Jul 2009 05:00:00 GMT

Investment Management Regulatory Update

Mon, 08 Jun 2009 05:00:00 GMT

Investment Management Regulatory Update

Fri, 08 May 2009 05:00:00 GMT

Investment Management Regulatory Update

Tue, 07 Apr 2009 05:00:00 GMT

Investment Management Regulatory Update

Tue, 03 Mar 2009 06:00:00 GMT

Investment Management Regulatory Update

Mon, 09 Feb 2009 06:00:00 GMT

Investment Management Regulatory Update

Tue, 13 Jan 2009 06:00:00 GMT

Investment Management Regulatory Update

Wed, 03 Dec 2008 06:00:00 GMT

Investment Management Regulatory Update

Sat, 01 Nov 2008 05:00:00 GMT