On June 18, 2012 the California Department of Corporations (DOC) published notice of additional changes to its proposed private fund adviser exemption regulation (10 CCR §260.204.9) and a new 15-day public comment period.

On June 8, 2012 the SEC’s Division of Investment Management issued an initial set of frequently asked questions (FAQs) related to the filing of Form PF on the PFRD (Private Fund Reporting Depository). Investment advisers registered with the SEC and their related persons (including commodity pool operators and commodity trading advisers required to register as investment advisers) who manage one or more private funds with assets under management (AUM) of at least $150 million are required to file Form PF. The requirement came into effect last year with the SEC’s unanimous adoption of Rule 204(b)-1 under the Advisers Act (see this helpful article published by JLG last year on Form PF). Under the rule, private fund advisers’ reporting obligations vary based on the type of private fund managed and the adviser’s AUM.

On May 30, 2012, the federal Government Accountability Office (GAO) released a report , mandated by Dodd-Frank, on its study of the SEC’s oversight of FINRA. The report is critical of the agency’s oversight of FINRA, calling on the agency to direct FINRA to conduct “retrospective reviews” of its rules and to identify ineffective rules that should be abandoned.

On May 22, 2012 the SEC announced the filing of a complaint in Federal District Court in the Southern District of Florida alleging violations of federal securities laws by two Fort Lauderdale residents – George Levin and Frank Preve. The SEC alleges that Levin and Preve raised over $157 million from 173 investors in less than two years by issuing promissory notes from Levin’s company and interests in a private investment fund they created in 2009. The funds were used to purchase bogus legal settlements from a former prominent Florida attorney, Scott Rothstein, who used investor funds to make payments due other investors and is currently serving a 50-year prison term as a result. The SEC’s complaint notes that Levin and Preve’s fund, Banyon Income Fund, was the largest source of capital for Rothstein’s Ponzi scheme.