Pub Date : 2020-12-07DOI: 10.1108/joic-09-2020-0022
G. Kukreja, Sanjay Gupta, A. Sarea, S. Kumaraswamy
Purpose The increasing incidence of fraudulent financial reporting by firms in recent years raises concerns about investors' confidence in capital markets. Academicians and industry practitioners adopt diverse risk management techniques to detect fraudulent reporting of financial statements. This paper aims to determine the effectiveness of the Beneish M-score and Altman Z-score models for the early detection of material misstatements at Comscore, Inc., a media analytics firm in the United States of America. Design/methodology/approach The financial statements of Comscore Inc. from 2012 to 2018 were analyzed with the primary objective of early fraud detection by employing the Beneish M-score and the Altman Z-score. Findings The study’s outcomes indicate that the Beneish M-score is less predictable in fraud detection compared to the Altman Z-score. The study results did not confirm the efficacy of the Beneish model in predicting fraudulent financial statements. The study concludes that the choice of forensic tool greatly influences fraud detection outcomes. Practical Implication The research findings can guide the policy decision-making of investors, financial auditors, and forensic auditors as this study provides some evidence of the effectiveness of forensic tools in the detection of financial statement fraud in corporate entities. Originality/value This is the first study to apply these two widely used tools to the most recent big corporate scandal: Comscore, Inc.
{"title":"Beneish M-score and Altman Z-score as a catalyst for corporate fraud detection","authors":"G. Kukreja, Sanjay Gupta, A. Sarea, S. Kumaraswamy","doi":"10.1108/joic-09-2020-0022","DOIUrl":"https://doi.org/10.1108/joic-09-2020-0022","url":null,"abstract":"Purpose The increasing incidence of fraudulent financial reporting by firms in recent years raises concerns about investors' confidence in capital markets. Academicians and industry practitioners adopt diverse risk management techniques to detect fraudulent reporting of financial statements. This paper aims to determine the effectiveness of the Beneish M-score and Altman Z-score models for the early detection of material misstatements at Comscore, Inc., a media analytics firm in the United States of America. Design/methodology/approach The financial statements of Comscore Inc. from 2012 to 2018 were analyzed with the primary objective of early fraud detection by employing the Beneish M-score and the Altman Z-score. Findings The study’s outcomes indicate that the Beneish M-score is less predictable in fraud detection compared to the Altman Z-score. The study results did not confirm the efficacy of the Beneish model in predicting fraudulent financial statements. The study concludes that the choice of forensic tool greatly influences fraud detection outcomes. Practical Implication The research findings can guide the policy decision-making of investors, financial auditors, and forensic auditors as this study provides some evidence of the effectiveness of forensic tools in the detection of financial statement fraud in corporate entities. Originality/value This is the first study to apply these two widely used tools to the most recent big corporate scandal: Comscore, Inc.","PeriodicalId":399186,"journal":{"name":"Journal of Investment Compliance","volume":"65 18","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2020-12-07","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"133488634","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2020-12-03DOI: 10.1108/joic-07-2020-0008
Robert L. Sichel, William Wade, Ruth Delaney, Kristina M. Zanotti, M. Mcgrath
Purpose To explain recent regulatory guidance for different types of stakeholders, including asset managers, fund complexes, and institutional investors. Design/methodology/approach Summary of recent regulatory guidance and explanation for different types of stakeholders, including asset managers, fund complexes, and institutional investors. Findings While the U.S. Department of Labor’s (DOL’s) letter does not open the door to direct access to Private Market Investments by 401(k) plan participants, it does provide a framework for the expanded use of private equity and, we believe, other types of Private Market Investments in managed asset allocation funds such as target date funds. Originality/value Practical guidance from experienced asset management and investment funds and ERISA lawyers.
{"title":"Private equity in 401(K) plans – a trillion dollar opportunity?","authors":"Robert L. Sichel, William Wade, Ruth Delaney, Kristina M. Zanotti, M. Mcgrath","doi":"10.1108/joic-07-2020-0008","DOIUrl":"https://doi.org/10.1108/joic-07-2020-0008","url":null,"abstract":"\u0000Purpose\u0000To explain recent regulatory guidance for different types of stakeholders, including asset managers, fund complexes, and institutional investors.\u0000\u0000\u0000Design/methodology/approach\u0000Summary of recent regulatory guidance and explanation for different types of stakeholders, including asset managers, fund complexes, and institutional investors.\u0000\u0000\u0000Findings\u0000While the U.S. Department of Labor’s (DOL’s) letter does not open the door to direct access to Private Market Investments by 401(k) plan participants, it does provide a framework for the expanded use of private equity and, we believe, other types of Private Market Investments in managed asset allocation funds such as target date funds.\u0000\u0000\u0000Originality/value\u0000Practical guidance from experienced asset management and investment funds and ERISA lawyers.\u0000","PeriodicalId":399186,"journal":{"name":"Journal of Investment Compliance","volume":"21 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2020-12-03","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"128935935","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2020-11-30DOI: 10.1108/joic-08-2020-0018
A. M. Leiva, Michael E. Clark
Purpose To examine the COVID-19 pandemic’s effects on regulated entities within the context of cybersecurity, US Securities and Exchange Commission (SEC) compliance, and parallel proceedings. Design/methodology/approach Describes the SEC’s ability to conduct its operations within the telework environment, its commitment and ability to monitor the securities market, its enhanced monitoring of the adverse effects of SEC-regulated companies from COVID-19, its guidance to public companies of disclosure obligations related to cybersecurity risks and incidents, the SEC Office of Compliance and Examinations’s (OCIE’s) focus on broker-dealers’ and investment advisories’ cybersecurity preparedness, the role and activities of the SEC Division of Enforcement’s Cyber Unit, and parallel proceedings on cyberbreaches and incidents by different agencies, branches of government or private litigants. Findings SEC-regulated entities face many challenges in trying to maintain their ongoing business operations and infrastructure due to severe financial pressures, the threat of infection to employees and customers, and cybersecurity risks posed by remote operations from hackers and fraudsters. The SEC has reemphasized that its long-standing focus on cybersecurity and resiliency within the securities industry will continue, including ongoing vigilance over companies’ efforts to identify, assess, and address the inherent, heightened cybersecurity risks of teleworking and the resource reallocation that business need to sustain their operations until a safe and effective vaccine is developed for COVID-19. Originality/value Expert analysis and guidance from experienced lawyers with expertise in securities, litigation, government enforcement, information technology, data protection, privacy and cybersecurity.
{"title":"COVID-19 considerations for SEC cybersecurity guidance, disclosure, enforcement, and parallel proceedings: navigating the new normal","authors":"A. M. Leiva, Michael E. Clark","doi":"10.1108/joic-08-2020-0018","DOIUrl":"https://doi.org/10.1108/joic-08-2020-0018","url":null,"abstract":"\u0000Purpose\u0000To examine the COVID-19 pandemic’s effects on regulated entities within the context of cybersecurity, US Securities and Exchange Commission (SEC) compliance, and parallel proceedings.\u0000\u0000\u0000Design/methodology/approach\u0000Describes the SEC’s ability to conduct its operations within the telework environment, its commitment and ability to monitor the securities market, its enhanced monitoring of the adverse effects of SEC-regulated companies from COVID-19, its guidance to public companies of disclosure obligations related to cybersecurity risks and incidents, the SEC Office of Compliance and Examinations’s (OCIE’s) focus on broker-dealers’ and investment advisories’ cybersecurity preparedness, the role and activities of the SEC Division of Enforcement’s Cyber Unit, and parallel proceedings on cyberbreaches and incidents by different agencies, branches of government or private litigants.\u0000\u0000\u0000Findings\u0000SEC-regulated entities face many challenges in trying to maintain their ongoing business operations and infrastructure due to severe financial pressures, the threat of infection to employees and customers, and cybersecurity risks posed by remote operations from hackers and fraudsters. The SEC has reemphasized that its long-standing focus on cybersecurity and resiliency within the securities industry will continue, including ongoing vigilance over companies’ efforts to identify, assess, and address the inherent, heightened cybersecurity risks of teleworking and the resource reallocation that business need to sustain their operations until a safe and effective vaccine is developed for COVID-19.\u0000\u0000\u0000Originality/value\u0000Expert analysis and guidance from experienced lawyers with expertise in securities, litigation, government enforcement, information technology, data protection, privacy and cybersecurity.\u0000","PeriodicalId":399186,"journal":{"name":"Journal of Investment Compliance","volume":"89 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2020-11-30","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"129429148","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2020-11-30DOI: 10.1108/joic-08-2020-0017
Kimberly Peretti, Amy Mushahwar, Jon Knight
Purpose Discusses the long-term cybersecurity challenges businesses face as COVID-19 cases spike and remote work environments need to remain operational, scalable, and capable of flexing with cycles of virus resurgence. Design/Methodology/Approach Discusses the target-rich environment cybercriminals have during this time, and steps businesses should take to secure their environments and raise employee awareness as more devices are being used remotely for company business and more company data is being sent, located, or stored outside the protections of the company infrastructure. Findings The remote work environment is likely to be around for the foreseeable future and businesses need to ensure they are secured for long-term success. Practical implications The authors offer information security and IT teams practical ways businesses can keep their systems secure and functioning: (1) Consider Basic Cyberhygiene; (2) Identify Security Blind Spots; (3) Review and Update Business Continuity, Disaster Recovery, and Incident Response Plans; (4) Remain Vigilant for Scams and Phishing Attacks; (5) Be Aware of Applicable Industry-Specific Guidelines; (6) Revisit Risk Exceptions. Originality/Value Practical guidance from experienced data privacy and cybersecurity lawyers in response to COVD-19 for Information Security, IT, and business management teams.
{"title":"Six practical tips for practicing cyberhygiene in the middle of a global pandemic","authors":"Kimberly Peretti, Amy Mushahwar, Jon Knight","doi":"10.1108/joic-08-2020-0017","DOIUrl":"https://doi.org/10.1108/joic-08-2020-0017","url":null,"abstract":"\u0000Purpose\u0000Discusses the long-term cybersecurity challenges businesses face as COVID-19 cases spike and remote work environments need to remain operational, scalable, and capable of flexing with cycles of virus resurgence.\u0000\u0000\u0000Design/Methodology/Approach\u0000Discusses the target-rich environment cybercriminals have during this time, and steps businesses should take to secure their environments and raise employee awareness as more devices are being used remotely for company business and more company data is being sent, located, or stored outside the protections of the company infrastructure.\u0000\u0000\u0000Findings\u0000The remote work environment is likely to be around for the foreseeable future and businesses need to ensure they are secured for long-term success.\u0000\u0000\u0000Practical implications\u0000The authors offer information security and IT teams practical ways businesses can keep their systems secure and functioning: (1) Consider Basic Cyberhygiene; (2) Identify Security Blind Spots; (3) Review and Update Business Continuity, Disaster Recovery, and Incident Response Plans; (4) Remain Vigilant for Scams and Phishing Attacks; (5) Be Aware of Applicable Industry-Specific Guidelines; (6) Revisit Risk Exceptions.\u0000\u0000\u0000Originality/Value\u0000Practical guidance from experienced data privacy and cybersecurity lawyers in response to COVD-19 for Information Security, IT, and business management teams.\u0000","PeriodicalId":399186,"journal":{"name":"Journal of Investment Compliance","volume":"7 5 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2020-11-30","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"130309086","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2020-11-30DOI: 10.1108/joic-09-2020-0024
W. Conner, Nathan Segal, J. M. Sanders
Purpose To analyze the SEC’s newly adopted Rule 498 A, the variable contract summary prospectus rule, and concurrently adopted prospectus disclosure requirements in order to propose to insurance companies issuing variable contracts a project implementation plan for companies seeking SEC approval for summary prospectuses compliant with the new rules. Design/methodology/approach Discusses the history, requirements, effects, and expected implementation timeline of the new rules, then offers a detailed project plan and timeline for compliance. Findings The Rule does not require insurers to use summary prospectuses, but there are several compelling reasons for doing so. The Rule allows insurers to use a new concise and brief selling document, and by so doing to begin generating very significant cost savings as soon as May 1, 2021. The article provides a detailed implementation plan for insurance companies that want to comply with the new prospectus disclosure requirements and implement policies and procedures to begin using summary prospectuses. Practical implications A coordinated project implementation plan like that outlined in the article might assist insurance companies to make the requisite statutory prospectus revisions and prepare and obtain SEC approval of summary prospectuses by May 1, 2021. Originality/value Analysis from experienced attorneys who frequently advise insurance companies issuing fixed and variable annuities, and assist clients in navigating the complex regulatory requirements governing insurance and securities products.
{"title":"New SEC variable contract summary prospectus rules: an implementation project plan","authors":"W. Conner, Nathan Segal, J. M. Sanders","doi":"10.1108/joic-09-2020-0024","DOIUrl":"https://doi.org/10.1108/joic-09-2020-0024","url":null,"abstract":"\u0000Purpose\u0000To analyze the SEC’s newly adopted Rule 498 A, the variable contract summary prospectus rule, and concurrently adopted prospectus disclosure requirements in order to propose to insurance companies issuing variable contracts a project implementation plan for companies seeking SEC approval for summary prospectuses compliant with the new rules.\u0000\u0000\u0000Design/methodology/approach\u0000Discusses the history, requirements, effects, and expected implementation timeline of the new rules, then offers a detailed project plan and timeline for compliance.\u0000\u0000\u0000Findings\u0000The Rule does not require insurers to use summary prospectuses, but there are several compelling reasons for doing so. The Rule allows insurers to use a new concise and brief selling document, and by so doing to begin generating very significant cost savings as soon as May 1, 2021. The article provides a detailed implementation plan for insurance companies that want to comply with the new prospectus disclosure requirements and implement policies and procedures to begin using summary prospectuses.\u0000\u0000\u0000Practical implications\u0000A coordinated project implementation plan like that outlined in the article might assist insurance companies to make the requisite statutory prospectus revisions and prepare and obtain SEC approval of summary prospectuses by May 1, 2021.\u0000\u0000\u0000Originality/value\u0000Analysis from experienced attorneys who frequently advise insurance companies issuing fixed and variable annuities, and assist clients in navigating the complex regulatory requirements governing insurance and securities products.\u0000","PeriodicalId":399186,"journal":{"name":"Journal of Investment Compliance","volume":"43 10 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2020-11-30","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"131089716","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2020-11-30DOI: 10.1108/joic-08-2020-0016
D. Roberts, Ettore A. Santucci, Mark Schonberger, Peter W. Lavigne
Purpose Over 15 years ago Goodwin created the first open-ended, non-traded real estate investment trust (REIT) with regular sales and redemptions at net asset value (“NAV REIT”). While NAV REITs are now well established, there is still room for improvement. Design/methodology/approach We traced the evolution of the NAV REIT’s innovative, investor-friendly features – transparent valuation to strike NAV, liquidity via redemption at NAV per share, indefinite life, lower/simpler selling and management fees, share classes with different upfront loads and trailing distribution fees. Findings To improve the liquidity feature of NAV REITs, share classes could be used to lower the drag on performance and match available liquid assets with expected redemption requests. The goal: balance inflows and outflows, optimize portfolio construction, and better safeguard liquidity. Practical implications One need not look far for the dark side of liquidity in open-ended real estate funds. The UK experience with regulated property funds is a painful object lesson. There is a better way: while traditional non-traded REITs were designed and marketed for investment by retail investors, NAV REITs appeal to a diverse range of investors, and share classes could be enhanced to offer both a menu of selling loads and a menu of liquidity and dividend-rate options to produce a smooth curve blending cost and time. Originality/value Innovation in structuring real estate investment vehicles has broadened choices for all and the NAV REIT is flexible, scalable, open-ended and cost-efficient. Fund sponsors, fund managers, financial advisors, investors and even regulators could find food for thought in our analysis.
{"title":"The past, present and future of the non-traded NAV REIT structure","authors":"D. Roberts, Ettore A. Santucci, Mark Schonberger, Peter W. Lavigne","doi":"10.1108/joic-08-2020-0016","DOIUrl":"https://doi.org/10.1108/joic-08-2020-0016","url":null,"abstract":"\u0000Purpose\u0000Over 15 years ago Goodwin created the first open-ended, non-traded real estate investment trust (REIT) with regular sales and redemptions at net asset value (“NAV REIT”). While NAV REITs are now well established, there is still room for improvement.\u0000\u0000\u0000Design/methodology/approach\u0000We traced the evolution of the NAV REIT’s innovative, investor-friendly features – transparent valuation to strike NAV, liquidity via redemption at NAV per share, indefinite life, lower/simpler selling and management fees, share classes with different upfront loads and trailing distribution fees.\u0000\u0000\u0000Findings\u0000To improve the liquidity feature of NAV REITs, share classes could be used to lower the drag on performance and match available liquid assets with expected redemption requests. The goal: balance inflows and outflows, optimize portfolio construction, and better safeguard liquidity.\u0000\u0000\u0000Practical implications\u0000One need not look far for the dark side of liquidity in open-ended real estate funds. The UK experience with regulated property funds is a painful object lesson. There is a better way: while traditional non-traded REITs were designed and marketed for investment by retail investors, NAV REITs appeal to a diverse range of investors, and share classes could be enhanced to offer both a menu of selling loads and a menu of liquidity and dividend-rate options to produce a smooth curve blending cost and time.\u0000\u0000\u0000Originality/value\u0000Innovation in structuring real estate investment vehicles has broadened choices for all and the NAV REIT is flexible, scalable, open-ended and cost-efficient. Fund sponsors, fund managers, financial advisors, investors and even regulators could find food for thought in our analysis.\u0000","PeriodicalId":399186,"journal":{"name":"Journal of Investment Compliance","volume":"15 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2020-11-30","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"124363136","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2020-11-26DOI: 10.1108/joic-07-2020-0012
Tiecheng Yang, Yang Chen, Scarlett Zhang, Virginia Qiao, Zhenyu Wang, Shuozhu Zheng
Purpose To introduce the Securities Law of the People's Republic of China (the “Securities Law 2019”) revised on 28 December 2019, and provide a detailed analysis on its key implications to the securities regulatory regime and market activities, especially securities issuance and trading activities in China. Design/methodology/approach This article starts from a historical overview of the Securities Law and its several revisions and amendments, highlights the notable core revisions in the Securities Law 2019, analyzes the key legal and regulatory impacts to the securities-related activities and market players, and finally, provides an outlook to the future developments of securities regulatory regime in conformity with the Securities Law 2019. Findings This article concludes that the revisions made to the Securities Law 2019 cover a broad range of issues including the issuance and trading of securities, acquisition of a listed company, information disclosure, securities registration and settlement, etc. Such revisions to the Securities Law will lead to far-reaching and profound implications on the securities regulatory system and industry practice in China. Practical implications The Securities Law 2019 attracts broad attention from securities market players as well as relevant professionals of the industry, including securities lawyers. As this is a novel and hot topic within the industry, it is important for securities lawyers to keep on track. Originality/value High-level guidance from experienced lawyers in the Capital Markets and Financial Regulation practices.
{"title":"Highlights of the new PRC securities law","authors":"Tiecheng Yang, Yang Chen, Scarlett Zhang, Virginia Qiao, Zhenyu Wang, Shuozhu Zheng","doi":"10.1108/joic-07-2020-0012","DOIUrl":"https://doi.org/10.1108/joic-07-2020-0012","url":null,"abstract":"\u0000Purpose\u0000To introduce the Securities Law of the People's Republic of China (the “Securities Law 2019”) revised on 28 December 2019, and provide a detailed analysis on its key implications to the securities regulatory regime and market activities, especially securities issuance and trading activities in China.\u0000\u0000\u0000Design/methodology/approach\u0000This article starts from a historical overview of the Securities Law and its several revisions and amendments, highlights the notable core revisions in the Securities Law 2019, analyzes the key legal and regulatory impacts to the securities-related activities and market players, and finally, provides an outlook to the future developments of securities regulatory regime in conformity with the Securities Law 2019.\u0000\u0000\u0000Findings\u0000This article concludes that the revisions made to the Securities Law 2019 cover a broad range of issues including the issuance and trading of securities, acquisition of a listed company, information disclosure, securities registration and settlement, etc. Such revisions to the Securities Law will lead to far-reaching and profound implications on the securities regulatory system and industry practice in China.\u0000\u0000\u0000Practical implications\u0000The Securities Law 2019 attracts broad attention from securities market players as well as relevant professionals of the industry, including securities lawyers. As this is a novel and hot topic within the industry, it is important for securities lawyers to keep on track.\u0000\u0000\u0000Originality/value\u0000High-level guidance from experienced lawyers in the Capital Markets and Financial Regulation practices.\u0000","PeriodicalId":399186,"journal":{"name":"Journal of Investment Compliance","volume":"97 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2020-11-26","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"124070245","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2020-11-26DOI: 10.1108/joic-09-2020-0027
G. Low, Terence Tan
Purpose To address recent cases and the applicable legal principles relating to cryptocurrency, and to contribute to legal thought in this developing area of law. Design/methodology/approach This article considers recent cryptocurrency related cases in Singapore, Canada and the United Kingdom, and then considers the implications of the developing law in relation to proper causes of action and issues of practical asset recovery relating to the enforcement of judgments. Findings The intangible and highly movable nature of cryptocurrency places a premium on decisive asset recovery. The cases also suggest that injunctions remain a useful and effective debt recovery tool, especially when coupled with quick investigative action to trace cryptocurrency payments. However, the law remains unsettled as to the most appropriate cause of action for a claim in cryptocurrency or how a debt in cryptocurrency can be subject to execution. These issues raise the fundamental question of the nature of cryptocurrency, whether it belongs to an existing category of property, or if it is sui generis. Practical implications Cryptocurrency remains relatively novel and usage is increasing but not widespread. Users of cryptocurrency and lawyers involved in transactions or disputes involving cryptocurrency would benefit from a broader understanding of the legal issues Originality/value This article provides expert analysis from experienced litigation lawyers familiar with the concepts behind cryptocurrency.
{"title":"Cryptocurrency – Is It Property?","authors":"G. Low, Terence Tan","doi":"10.1108/joic-09-2020-0027","DOIUrl":"https://doi.org/10.1108/joic-09-2020-0027","url":null,"abstract":"\u0000Purpose\u0000To address recent cases and the applicable legal principles relating to cryptocurrency, and to contribute to legal thought in this developing area of law.\u0000\u0000\u0000Design/methodology/approach\u0000This article considers recent cryptocurrency related cases in Singapore, Canada and the United Kingdom, and then considers the implications of the developing law in relation to proper causes of action and issues of practical asset recovery relating to the enforcement of judgments.\u0000\u0000\u0000Findings\u0000The intangible and highly movable nature of cryptocurrency places a premium on decisive asset recovery. The cases also suggest that injunctions remain a useful and effective debt recovery tool, especially when coupled with quick investigative action to trace cryptocurrency payments. However, the law remains unsettled as to the most appropriate cause of action for a claim in cryptocurrency or how a debt in cryptocurrency can be subject to execution. These issues raise the fundamental question of the nature of cryptocurrency, whether it belongs to an existing category of property, or if it is sui generis.\u0000\u0000\u0000Practical implications\u0000Cryptocurrency remains relatively novel and usage is increasing but not widespread. Users of cryptocurrency and lawyers involved in transactions or disputes involving cryptocurrency would benefit from a broader understanding of the legal issues\u0000\u0000\u0000Originality/value\u0000This article provides expert analysis from experienced litigation lawyers familiar with the concepts behind cryptocurrency.\u0000","PeriodicalId":399186,"journal":{"name":"Journal of Investment Compliance","volume":"14 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2020-11-26","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"121991936","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2020-11-23DOI: 10.1108/joic-09-2020-0023
Jerry Koh, Jonathan Lee
Purpose To introduce the various private fund structuring options available in Singapore, an important fund management hub that has increasingly also come to be recognized as a popular fund domicile with its pro-business environment, transparent and robust regulatory regime and government support through tailored investment structures, tax incentives and extensive double taxation treaties. Design/methodology/approach This article provides an overview of the available private fund structures as well as the key legal issues and considerations that fund managers and investors should take into account when structuring a private fund. It also provides a brief summary of the available tax incentive schemes for funds in Singapore. Findings With growth in private market assets under management fueled by private equity funds over the last decade, the use of private investment funds established in Singapore has become a popular means to tap the large capital inflows into Asia. Singapore offers a wide range of fund structures to suit different fund strategies and considerations, including the variable capital company (“VCC”) structure, a legal structure tailored for use as investment funds that was introduced in January 2020. Practical implications There are a range of Singapore private fund structures available with different features, including the VCC, which is a corporate structure that allows for umbrella-sub-fund structures with segregated assets and liabilities, and the limited partnership, which is familiar to international investors and permits a large degree of contractual flexibility. Other structures such as unit trusts and private companies may also be suitable depending on the particular circumstances and objectives of the fund. Fund managers who are exploring setting up fund vehicles to tap Asian capital or to invest in Asia should be aware of the possible options, and their pros and cons. Originality/value Practical analysis and guidance and market commentary from experienced investment funds lawyers.
{"title":"The increasing popularity of private funds","authors":"Jerry Koh, Jonathan Lee","doi":"10.1108/joic-09-2020-0023","DOIUrl":"https://doi.org/10.1108/joic-09-2020-0023","url":null,"abstract":"\u0000Purpose\u0000To introduce the various private fund structuring options available in Singapore, an important fund management hub that has increasingly also come to be recognized as a popular fund domicile with its pro-business environment, transparent and robust regulatory regime and government support through tailored investment structures, tax incentives and extensive double taxation treaties.\u0000\u0000\u0000Design/methodology/approach\u0000This article provides an overview of the available private fund structures as well as the key legal issues and considerations that fund managers and investors should take into account when structuring a private fund. It also provides a brief summary of the available tax incentive schemes for funds in Singapore.\u0000\u0000\u0000Findings\u0000With growth in private market assets under management fueled by private equity funds over the last decade, the use of private investment funds established in Singapore has become a popular means to tap the large capital inflows into Asia. Singapore offers a wide range of fund structures to suit different fund strategies and considerations, including the variable capital company (“VCC”) structure, a legal structure tailored for use as investment funds that was introduced in January 2020.\u0000\u0000\u0000Practical implications\u0000There are a range of Singapore private fund structures available with different features, including the VCC, which is a corporate structure that allows for umbrella-sub-fund structures with segregated assets and liabilities, and the limited partnership, which is familiar to international investors and permits a large degree of contractual flexibility. Other structures such as unit trusts and private companies may also be suitable depending on the particular circumstances and objectives of the fund. Fund managers who are exploring setting up fund vehicles to tap Asian capital or to invest in Asia should be aware of the possible options, and their pros and cons.\u0000\u0000\u0000Originality/value\u0000Practical analysis and guidance and market commentary from experienced investment funds lawyers.\u0000","PeriodicalId":399186,"journal":{"name":"Journal of Investment Compliance","volume":"20 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2020-11-23","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"125696053","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2020-11-23DOI: 10.1108/joic-08-2020-0019
Allen R. Friedman, Dani R. James, Gary P. Naftalis, Paul H. Schoeman, C. H. Mechanick
Purpose To analyze the U.S, Supreme Court’s decision in Liu v. S.E.C., 140 S. Ct. 1936 (2020) and its potential implications for insider trading cases. Design/Methodology/Approach Provides context on the history of disgorgement in SEC enforcement proceedings; discusses factual and procedural background underlying the Liu decision; summarizes the Court’s opinion and rationale, with a particular focus on the Court’s pronouncements regarding the permissible scope of SEC disgorgement as an equitable remedy; identifies and explores three possible issues in insider trading cases that may be affected by the Court’s narrowing of SEC disgorgement. Findings In Liu, the Supreme Court narrowed SEC disgorgement by stating that, as a general matter, SEC disgorgement is not permitted where: (1) the proceeds are not remitted to investors; (2) one defendant is made to disgorge profits that were received by someone else; or (3) the amount of disgorgement fails to deduct legitimate business expenses, in each case subject to possible exemptions as outlined by the Court. Practical implications This rule may call into question whether courts may: (a) order disgorgement against insider traders, given the difficulty of identifying investors who have been harmed; (b) order insider traders to disgorge profits earned by others on account of their violations; or (c) order insider traders to pay civil penalties under Section 21 A of the Exchange Act based on profits earned by others. Originality/Value Expert analysis and guidance from experienced securities enforcement lawyers with expertise in insider trading.
目的分析美国最高法院在Liu v. S.E.C, 140 S. Ct. 1936(2020)一案中的判决及其对内幕交易案件的潜在影响。设计/方法/方法提供SEC执法程序中分类的历史背景;讨论刘案判决的事实和程序背景;总结了法院的意见和理由，特别侧重于法院关于证券交易委员会撤销作为一种公平救济的允许范围的声明;确定并探讨了内幕交易案件中可能受到法院缩小SEC分类范围影响的三个可能问题。在刘先生的裁决中，最高法院缩小了SEC的追缴范围，指出，作为一般事项，在以下情况下不允许SEC追缴:(1)收益未汇给投资者;(二)强迫一被告交出他人所得利益的;或(3)扣缴的金额未能扣除合法的业务费用，在每种情况下，均受法院概述的可能豁免的限制。这条规则可能会让人质疑法院是否可以:(a)鉴于难以确定受到损害的投资者，法院是否可以下令对内幕交易者进行追缴;(二)责令内幕交易者交出他人因其违法行为获得的利润;或(c)命令内幕交易者根据《交易法》第21a条根据他人赚取的利润支付民事罚款。原创性/价值专家分析和指导经验丰富的证券执法律师在内幕交易方面的专长。
{"title":"Liu v. S.E.C.: Supreme Court’s narrowing of SEC disgorgement raises questions for insider trading cases","authors":"Allen R. Friedman, Dani R. James, Gary P. Naftalis, Paul H. Schoeman, C. H. Mechanick","doi":"10.1108/joic-08-2020-0019","DOIUrl":"https://doi.org/10.1108/joic-08-2020-0019","url":null,"abstract":"\u0000Purpose\u0000To analyze the U.S, Supreme Court’s decision in Liu v. S.E.C., 140 S. Ct. 1936 (2020) and its potential implications for insider trading cases.\u0000\u0000\u0000Design/Methodology/Approach\u0000Provides context on the history of disgorgement in SEC enforcement proceedings; discusses factual and procedural background underlying the Liu decision; summarizes the Court’s opinion and rationale, with a particular focus on the Court’s pronouncements regarding the permissible scope of SEC disgorgement as an equitable remedy; identifies and explores three possible issues in insider trading cases that may be affected by the Court’s narrowing of SEC disgorgement.\u0000\u0000\u0000Findings\u0000In Liu, the Supreme Court narrowed SEC disgorgement by stating that, as a general matter, SEC disgorgement is not permitted where: (1) the proceeds are not remitted to investors; (2) one defendant is made to disgorge profits that were received by someone else; or (3) the amount of disgorgement fails to deduct legitimate business expenses, in each case subject to possible exemptions as outlined by the Court.\u0000\u0000\u0000Practical implications\u0000This rule may call into question whether courts may: (a) order disgorgement against insider traders, given the difficulty of identifying investors who have been harmed; (b) order insider traders to disgorge profits earned by others on account of their violations; or (c) order insider traders to pay civil penalties under Section 21 A of the Exchange Act based on profits earned by others.\u0000\u0000\u0000Originality/Value\u0000Expert analysis and guidance from experienced securities enforcement lawyers with expertise in insider trading.\u0000","PeriodicalId":399186,"journal":{"name":"Journal of Investment Compliance","volume":"106 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2020-11-23","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"126805219","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
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