In a speech at the MIT Sloan School of Management's Center for Finance and Policy, Craig M. Lewis, SEC Chief Economist and Director of the Division of Economic and Risk Analysis (the "Division"), addressed capital formation and the potential impact of new capital-raising opportunities created by the JOBS Act. Citing the SEC's obligation to determine whether an action will "promote efficiency, competition and capital formation," Director Lewis began by questioning whether capital formation rules actually promote capital formation. (In this regard, he observed that only a small part of the

The SEC charged Total Wealth Management ("Total Wealth") chief executive officer Jacob Cooper, chief compliance officer Nathan McNamee, and another employee for misleading investors and breaching their fiduciary duties to clients. The SEC's Enforcement Division alleges that Total Wealth Management and its owner and CEO, Jacob Cooper, entered into undisclosed revenue-sharing agreements through which they paid themselves kickbacks or so-called "revenue sharing fees." They failed to disclose the conflicts of interest created by these agreements when recommending the underlying investments to

On April 14, 2014, the Department of Justice (the "DOJ") announced the indictment of two former executives of defunct broker-dealer Direct Access Partners LLC ("DAP") on charges of conspiracy, money laundering, and violations of the Foreign Corrupt Practice Act (the "FCPA") and the Travel Act. Benito Chinea, cofounder and former chief executive officer, and Joseph DeMeneses, former managing partner for global strategy, are alleged to have paid kickbacks to a high-ranking official at state-owned Banco de Desarrollo Económico y Social de Venezuela ("BANDES"), in exchange for directing the bank's

The IRS has announced that it will amend recently issued Temporary Regulations to make clear that U.S. persons that own stock of a Passive Foreign Investment Company ("PFIC") through a tax-exempt organization or account are not "shareholders" of the PFIC. Section 1291 of the Code imposes a special tax and interest charge on a U.S. person that is a shareholder of a PFIC that receives an "excess distribution" or recognizes gain from the sale or other disposition of PFIC stock. A non-U.S. corporation is a PFIC if either 75% or more of its gross income is passive or 50% or more of its assets are

The staff of the SEC Division of Investment Management (the "staff") issued a Guidance Update regarding the deregistration of investment companies and the accompanying Form N-8F. In the Guidance, the staff stated that it reviews Form N-8F applications on a rolling basis and that, if there are no deficiencies in an application, the staff will prepare a notice to inform the public that the application has been filed. Generally, the guidance notes, the staff issues notices of deregistration on the last Friday of every month. Following a 25-day period, the SEC will then issue an order granting a