On October 17, 2013, Fantex Holdings launched an “all-new marketplace that allows investors to buy and sell Fantex, Inc. stock linked to the value and performance of the brand of a professional athlete.”1 The Initial Public Offering will be called a “Fantex Series Arian Foster Convertible Tracking Stock.”2 The offering has been subject some confusion….
Tag: Regulatory
SEC’s Focus on Broker-Dealer Registration
SEC has recently made broker-dealer registration an area of focus for private fund managers. This is bad news for the private equity industry, as the burdens and costs of registration and on-going compliance with SEC requirements are substantial. The regulatory framework starts with Section 15(a) of the Exchange Act, which requires that persons engaged in…
How the Foreign Account Tax Compliance Act Will Impact Foreign Financial Institutions and How to Incentivize Compliance
What is FACTA and who is affected by it? The Foreign Account Tax Compliance Act (FATCA), coming into effect in July 2014, requires any Foreign Financial Institution (FFI) that elects to comply with the Act to do three things: 1) identify its U.S. account holders; 2) annually report the account holders to the IRS; and 3) withhold…
Strategic Deregulation: Potential Impacts of Allowing Foreign Private Equity Fundraising in China
How the Chinese government chooses to open up sectors of its financial industry will dictate the returns that investors may receive. Recent deregulation is beneficial because it affords Chinese investors an alternative avenue to invest savings, but significant hurdles remain before domestic private equity (PE) funds will be able to reinvest in domestic startups. The…
Should You Form an LLC or C-Corporation?
If you are considering this question, you already have a business concept, a business plan (hopefully), and have done enough market research to ensure that your idea will have some traction and solve some pain point. But, you are unsure of which business entity to choose. Both entity types have their pros and cons, which…
The SEC’s Lift on the Ban on General Solicitation
On July 10, 2013, the Securities and Exchange Commission lifted an 80-year old ban on the general solicitation of private securities offerings to individual investors. The decision came as a response to Section 201(a) of the Jumpstart Our Business Startups (JOBS) Act of 2012, which amends Rule 506 of Regulation D under the Securities Act…
PE Firms Managing Tax Rates: Is the Management Fee Waiver Legal?
Private equity firms are no strangers to controversy when it comes to their compensation arrangements. In the most recent presidential election, Mitt Romney and the entire private equity industry came under intense scrutiny from both the electorate and politicians for the tax rate paid on carried interest. Carried interest is taxed at the capital gains…
Trends in Healthcare Investment
Historically, healthcare has been an attractive area for private equity investment due to strong returns and low default rates.1 In the future, it should remain attractive and continue to be a stable sector for investment. It is unlikely there will be any decrease in the demand for healthcare in the near future, especially with America’s…
The SEC Will Remain Open During the Government Shutdown
According to SEC spokesman John Nester, “The SEC will be able to stay open in the event of a funding lapse because we [the SEC] have carryover funds available.”1 According to Business Insider, “John Nester wouldn’t say how much cash the agency has,” however, the SEC issued a contingency plan for operating in the event…
The Dodd-Frank Act – Volcker Rule: More Strain on Foreign Banks Operating in the U.S. Today
The Dodd-Frank Act was enacted on July 21, 2010 after intense debate within the investment banking industry and the political realm in Washington D.C. to address the consequences of the “Lehman Shock” and other lessons learned from the 2008 financial crisis that affected the world economy.1 One area that congress did not consider in depth…