Articles By Topic
By Topic: Soft Dollars
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From Vol. 5 No.29 (Jul. 26, 2012)
U.S. Bankruptcy Court Rules on Whether Money Managers’ “Soft Dollar” Credits Are Entitled to “Customer” Priority in Lehman SIPA Liquidation
When Lehman Brothers collapsed in 2008, hundreds of money managers that used its brokerage arm, Lehman Brothers Inc. (Lehman), to execute trades were left with unspent “soft dollar” commission credits. In the Lehman liquidation proceeding, a number of those managers claimed that they were “customers” of Lehman with respect to those soft dollar balances within the meaning of the Securities Investor Protection Act of 1970 (SIPA). Brokerage “customers” are entitled to priority in a SIPA liquidation over the claims of unsecured creditors of the brokerage firm. The U.S. Bankruptcy Court for the Southern District of New York (Bankruptcy Court) recently ruled on whether the money managers’ claims for “soft dollar” credit balances represent “customer” claims under SIPA or whether such claims must be treated as general unsecured claims. This article summarizes the background in this case and the Bankruptcy Court’s decision and reasoning.
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From Vol. 5 No.3 (Jan. 19, 2012)
Primary Regulatory and Business Considerations When Opening a Hedge Fund Management Company Office in Asia (Part Four of Four)
This article is the fourth in a four-part series by Maria Gabriela Bianchini, founder of Optionality Consulting. The first article in this series identified factors that hedge fund managers should consider in determining whether to open an office in Asia and compared the relative merits of Hong Kong and Singapore as locations for an office. See “Primary Regulatory and Business Considerations When Opening a Hedge Fund Management Company Office in Asia (Part One of Four),” The Hedge Fund Law Report, Vol. 4, No. 43 (Dec. 1, 2011). The second article in this series discussed technical steps and considerations for the actual process of opening an office in either Hong Kong or Singapore. See “Primary Regulatory and Business Considerations When Opening a Hedge Fund Management Company Office in Asia (Part Two of Four),” The Hedge Fund Law Report, Vol. 4, No. 44 (Dec. 8, 2011). The third article in this series described the practical impact of Singapore’s new regulatory regime on hedge fund managers. See “Primary Regulatory and Business Considerations When Opening a Hedge Fund Management Company Office in Asia (Part Three of Four),” The Hedge Fund Law Report, Vol. 4, No. 45 (Dec. 15 2012). This article series concludes with a discussion of topical regulatory issues regarding opening an office in Hong Kong.
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From Vol. 2 No.49 (Dec. 10, 2009)
FINRA Fines Terra Nova $400,000 for Making Over $1 Million in Improper Soft Dollar Payments to Hedge Fund Managers
On November 23, the Financial Industry Regulatory Authority (FINRA) fined Terra Nova Financial, LLC, of Chicago, $400,000 for making more than $1 million in improper “soft dollar” payments to or on behalf of five hedge fund managers. The broker-dealer did not follow its own policies to ensure the payments were proper, according to FINRA. We detail the factual background and legal basis for the fine imposed by FINRA.
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