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Displaying 10 out of 24 results for "Private Placements".

SEC Charges South Miami with Defrauding Investors

(May 2013)

Yesterday the Securities and Exchange Commission (SEC) charged the City of South Miami with defrauding investors over the tax-exempt status of some municipal offerings.

In 2002, the City of South Florida obtained access to tax-exempt financing through a pooled conduit municipal bond issued by the Florida Municipal Loan Council (FMLC) to fund the construction of a mixed-use retail and parking structure in the city's commercial district.* The 2002 FMLC bond offering can be found online. The...

New FINRA Guidelines for Non-Traded and Private REITs

(May 2013)

In recent months, FINRA has been investigating how non-traded and private real estate investment trusts (REITs) are presented to retail investors. Last week, FINRA alerted broker-dealers that they had uncovered "deficiencies" in how these investments are sold, and issued Regulatory Notice 13-18 "to provide guidance to firms on communications with the public concerning unlisted real estate investment programs, including unlisted real estate investment trusts (REITs) and unlisted direct...

SEC Charges Victorville, CA and Airport Authority with Securities Fraud

(May 2013)

Earlier this week, the SEC charged the City of Victorville, California and several other entities with municipal bond fraud. The charges relate to a $13.3 million 2008 bond offering by the Southern California Logistics Airport (SCLA) Authority, which was intended to refinance an "ill-conceived" redevelopment project for airplane hangers at the former George Air Force Base, which closed in 1992.

Municipal bonds are sometimes considered among the safest investments available. Municipal bond...

Major Tenants-in-Common Sponsor Charged with Fraud

(Apr 2013)

Four former executives of DBSI, one of the largest sponsors of tenants-in-common (TIC) interests, have been indicted on 83 counts of securities fraud, wire fraud, mail fraud, and interstate transportation of stolen property. The indictment is seeking approximately $169 million in forfeiture of properties and assets, alleging that the executives misrepresented the financial condition of DBSI to potential investors. The executives named wereformer president Douglas Swenson, general counsel...

Private Equity Fund Advisers Charged with Misleading Investors about Valuation and Performance

(Mar 2013)

Earlier this week, the SEC charged Oppenheimer Asset Management (OAM) and Oppenheimer Alternative Investment Management (OAIM) with misrepresenting the performance of the Oppenheimer Global Resource Private Equity Fund I L.P. (OGR) in their marketing materials. The SEC found that OGR's manager used his own valuation methodology to value the fund's largest investment, Cartesian Investors-A LLC ("Cartesian"), at a significant markup. This inflated valuation led to a ten-fold increase in OGR's...

SEC Examination Priorities 2013

(Feb 2013)

Last week, the Securities and Exchange Commission announced their examination priorities for 2013 "to communicate with investors and registrants about areas that are perceived by the staff to have heightened risk, and to support the SEC's mission to protect investors, maintain fair, orderly, and efficient markets, and facilitate capital formation."

For those that are unfamiliar, SEC staff conducts examinations of SEC registrants through their regional offices and headquarters

to determine...

SEC Charges Tiger Asia Executive with Insider Trading

(Dec 2012)

Earlier this week, the Securities and Exchange Commission (SEC) charged two New York-based hedge fund managers with insider trading. Sung Kook "Bill" Hwang of Tiger Asia Management and Tiger Asia Partners admitted to using material non-public information to short sell shares of Bank of China Ltd. and China Construction Bank Corp resulting in nearly $17 million in unlawfully gained profits. Tiger Asia covered its short positions with private placement shares that were obtained at a discount....

Massachusetts Securities Regulators Getting Tough on Non-Traded REITs

(Dec 2012)

LPL Financial, the largest independent broker-dealer in the US, is being sued by Massachusetts securities regulators for "numerous regulatory violations in connection with the sale of non-traded REITs." We have covered non-traded REITs extensively on this blog, as well as in a detailed working paper, and it appears that many of the problems that have been identified with these products are finally attracting attention from regulators.

According to the complaint, the action is specifically...

SEC Charges KCAP Financial with Overvaluing Assets

(Nov 2012)

The SEC alleges that KCAP Financial, a publicly traded business development company (BDC), did not accurately report the fair value of its corporate debt and collateralized loan obligation (CLO) assets during the financial crisis, thereby misleading investors. According to the press release, KCAP valued some of their assets at cost, not at fair market value, overstating the net asset value by over 25% during the peak of the financial crisis.

BDCs are similar to REITs in that they hold...

JOBS Act Double-Take

(Nov 2012)

Senator Carl Levin (D-MI) and colleagues have written two letters (here and here)to the SEC "to express [Congress's] concerns with, and offer improvements to, the Commission's Proposed Rule to implement Section 201 of the Jumpstart Our Business Startups Act (the JOBS Act)." Basically, the Senators argue that the SEC has misinterpreted the JOBS Act as allowing for widespread solicitation for private placement investments, when apparently Congress had no such intent. From the second letter:

In...

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