Holland & Hart Securities Blog

COURT INVALIDATES SEC RULES REQUIRING REGISTRATION OF HEDGE FUND ADVISERS

         In a serious blow to the SEC, the U.S. Court of Appeals for the D.C. Circuit recently invalidated Advisers Act Rule 203(b)(3)-2, requiring most hedge fund advisers to register with the Commission.  Goldstein v. SEC, No. 04-1434 (June 23, 2006). This ruling calls into question the SEC’s ability to regulate the entire hedge fund industry. 

Effective Responses to Findings of Deficiency

             Despite the best efforts of broker-dealers and investment advisers to fully comply with all relevant rules, there are times when NASD or SEC examiners find deficiencies during an examination.  This is not surprising, given the increasing complexity of securities regulation and current harsh political climate.  The manner in which a firm responds to a notice of deficiencies is critical.  This article describes the regulatory decisionmaking process and effective responses to such a notice.