Big news today (June 5) as the 5th circuit court of appeals VACATED the SEC’s private fund adviser rule!! Go back and listen to Episode 21 if you want to waste your time hearing all the details of this now-defunct rule.

Special Note: you may notice while listening to today’s episode that I mistakenly refer listeners to Episode 29 for my full PFAR breakdown (I refer to “Episode 29” several times). Turns out, I’m even worse at math than I thought, because my PFAR episode is # 21; not 29…Rather than delay the episode and re-record, I’m alerting you here. Cuz everyone reads the show notes, obviously.

Key Points From This Episode:

• What is Section 206(4) of the Advisers Act, and why does it NOT give the SEC authority to issue PFAR?
• What is Section 211(h) of the Advisers Act, and why does it NOT give the SEC authority to issue PFAR?
• What provisions of the Advisers Act DO give the SEC authority to issue PFAR? Hint: None.
• A little bragging about how prescient I was in Episode 21 (not episode 29).

Disclaimer:

This show is for informational purposes only. Nothing presented here constitutes legal advice. Tokens of Wisdom is produced by Dave Rothschild, partner at Cole-Frieman & Mallon LLP headquartered in San Francisco, California. For more information, visit https://colefrieman.com/

Links Mentioned in Today’s Episode:

5th Circuit Ruling - https://storage.courtlistener.com/recap/gov.uscourts.ca5.215539/gov.uscourts.ca5.215539.123.1.pdf

Dave Rothschild - https://www.linkedin.com/in/davidcrothschild/

Cole-Frieman & Mallon LLP - https://colefrieman.com/

Music by Joe Ginsberg - https://www.instagram.com/thejoeginsberg

For any questions or comments, email: tow@colefrieman.com

Today’s episode is all about the government’s attempts to jam the square peg of crypto mixers Tornado Cash and Samourai Wallet into the round hole of unlicensed “money transmitters”.

But to grasp the full story, we need to understand some basic terms. Like “money transmitter”.

Key Points From This Episode:

• What are (were?) Tornado Cash and Samourai Wallet?
• What is a “money transmitter”?
• The regulatory area where crypto guidance from the federal government has been relatively clear and proactive.
• Why these actions undercut that seeming clarity.
• A soapbox moment about “due process” and fairness.

Disclaimer:

This show is for informational purposes only. Nothing presented here constitutes legal advice. Tokens of Wisdom is produced by Dave Rothschild, partner at Cole-Frieman & Mallon LLP headquartered in San Francisco, California. For more information, visit https://colefrieman.com/

Links Mentioned in Today’s Episode:

Dave Rothschild - https://www.linkedin.com/in/davidcrothschild/

Cole-Frieman & Mallon LLP - https://colefrieman.com/

Music by Joe Ginsberg - https://www.instagram.com/thejoeginsberg

For any questions or comments, email: tow@colefrieman.com

Last episode we dissected the SEC’s “venture capital fund” definition and discussed how, if an adviser manages only VC funds, there is no AUM ceiling on its ability to remain exempt from registration. If that same adviser manages money for any non-Venture capital fund, it has to register as an investment adviser once AUM hits $150mm. This can lead some less scrupulous investment advisers to try to “game” the system by forming new adviser entities, thinking they can skirt regulation by forming new legal entities.

Well, not so fast. The wool can’t be pulled over Uncle Sam’s eyes that easily (unfortunately?) – the SEC has a doctrine of “adviser integration” where under certain circumstances, two ostensibly separate investment adviser entities are treated as one business for purposes of advisers act compliance.

Key Points From This Episode:

• Under what circumstances are two ostensibly separate investment adviser entities treated as one business?
• What is operational independence?
• The four areas the SEC focuses its analysis:
• Capital structure
• Control
• Personnel
• Investment decision-making
• Why, if this analysis is relevant to you, you really need a good lawyer.

Disclaimer:

This show is for informational purposes only. Nothing presented here constitutes legal advice. Tokens of Wisdom is produced by Dave Rothschild, partner at Cole-Frieman & Mallon LLP headquartered in San Francisco, California. For more information, visit https://colefrieman.com/

Links Mentioned in Today’s Episode:

Dave Rothschild - https://www.linkedin.com/in/davidcrothschild/

Cole-Frieman & Mallon LLP - https://colefrieman.com/

Music by Joe Ginsberg - https://www.instagram.com/thejoeginsberg

For any questions or comments, email: tow@colefrieman.com