ERISA for Registered Investment Advisers and Broker-Dealers
We aid all state and U.S. Securities and Exchange Commission ("SEC") registered investment advisers (RIAs), broker-dealers, investment funds and others with their ERISA legal and compliance needs.
Prohibited Transaction Exemption ("PTE") 2020-20
LawVisory helps our clients with all ERISA legal and compliance matters to ensure they are in full compliance with ERISA and so they and their clients do not suffer the extremely harsh consequences of prohibited transactions that are not covered by an exemption.
Prior to 2020, investment advice regarding IRAs, including as to rolling over assets (from an ERISA plan or another IRA) that was not provided on a regular basis was not considered “investment advice” and the RIA was not necessarily an ERISA fiduciary -- therefore the RIA was not subject to ERISA. This has now changed.
PTE 2020-02 became effective on February 16, 2021 as to the expanded definition of fiduciary advice for enforcement purposes and the PTE. However, a non-enforcement policy has delayed most, but not all, of the PTE conditions to December 21, 2021.
For instance, the requirement to document the reasons that a rollover recommendation is in the best interest of the retirement investor and provide that documentation to the retirement investor has not been included under the non-enforcement policy.
Compliance with PTE 2020-02 has basically six parts. The ERISA fiduciary must:
1. Provide advice in accordance with the Impartial Conduct Standards;
2. Acknowledge in writing their and their investment professionals’ fiduciary status under Title I of ERISA and the IRC, as applicable, when providing investment advice to the retirement investor.
3. Describe in writing the services to be provided and the financial institutions’ and investment professionals’ material conflicts of interest.
4. Document the reasons that a rollover recommendation is in the best interest of the retirement investor and provide that documentation to the retirement investor.
5. Adopt policies and procedures prudently designed to ensure compliance with the Impartial Conduct Standards and that mitigate conflicts of interest.
6. Conduct an annual retrospective review of compliance with PTE 2020-02.
We represent state and SEC RIAs, broker-dealers, investment funds and others in the investment management or financial services business.
Preparing an effective Investment Advisory Agreement
There are a number of arrangements between clients, their financial advisors and service providers to the financial advisors. One common structure is the sub-advisory relationship, where the financial advisor engages the services of an external money manager to optimize the type of investment strategies, funds, investment programs and other investing opportunities that such an external money manager may offer.
One common structure is the sub-advisory relationship where the end-client engages the investment advisor who separately engages the sub-advisor to assist in managing the end client’s funds. Another common arrangement is where the client engages the investment advisor and also directly engages the external money manager as a third party asset manager (“TPAM”).
LawVisory has extensive experience in preparing the underlying investment advisory agreements for investment advisers (also known as asset management agreements), as well as sub-advisory agreements and third-party asset manager agreements.
Preparing required Disclosures and Registering Advisors
Form ADV is a filing used by investment advisers to register and to provide obligatory annual continuous disclosure reporting. The filing serves federally registered investment advisers and appropriate state securities regulators, including the District of Columbia, the U.S. Virgin Islands, and Puerto Rico. Form ADV, also known as the Uniform Application for Investment Advisor Application, is a critical document for registered investment advisors and “exempt reporting advisers.”
The Investment Adviser Brochure and its supplements are highly regulated disclosure documents that must be drafted in plain English and provided to new investment adviser’s clients.
The LawVisory team has substantial experience, as legal counsel and as Chief Compliance Officers in preparing Form ADV disclosures.
Assistance in picking the right business model
The right business entity and the appropriate team structuring depends on a mix of critical factors, including business objectives, location of business, residences of clients, expected revenue generation, inherent business risk and tax consequences.
LawVisory team has substantive, in-depth experience in advising and assisting clients with the business structuring of their businesses, whether the businesses are registered investment advisers (including independent RIAs), broker-dealers, and alternative trading platforms.
SECURITIES ENFORCEMENT AND COMPLIANCE
We represent companies and individuals in all phases investigations by federal and state agencies, including SEC, Financial Industry Regulatory Authority (“FINRA”), and state securities regulatory agencies.
Investigations and Enforcement actions present serious risks
LawVisory professionals represent clients in investigations and enforcement proceedings concerning federal securities laws, FINRA rules, and AML regulations.
Ensuring Compliance Programs meet required regulations
We assist investment advisors and broker-dealers with the development, auditing, and testing of compliance policies, procedures, and systems. We also assist broker-dealers with the internal inspections, annual evaluations, and certifications required by FINRA Rules 3010, 3012, and 3013. We also conduct SEC Rule 206(4)-7 annual reviews for investment advisors. Our experience also includes conducting mock examinations for investment advisers and broker-dealers.
We provide principled and sensible advice
We regularly counsel RIAs and broker-dealers on all aspects of the federal securities laws and FINRA rules.
LawVisory attorneys have assisted and represented fund sponsors, fund managers, foreign investors, and local investors. We have advised and represented venture capital funds, private equity funds, real estate development funds, real property income producing funds, hedge funds, and closed-ended public securities funds. Our team has experience in fund formation, fund mergers, master and feeder fund structuring, and off-shore fund issues.
Trusted Counsel to Funds
LawVisory lawyers have a deep and refined understanding of the Securities Act of 1933, Securities Exchange Act of 1934, Investment Company Act of 1940, Investment Adviser’s Act of 1940 and fund-specific tax issues (such as UBTI, FIRPTA withholding and carried interest).
Fund Documentation Drafting & Negotiation
LawVisory has substantial experience in drafting fund documents, including the private placement memorandum (“PPM”), limited partnership agreements, operating agreements, and confidentiality agreements. We have also negotiated underlying documents such as the development agreement for a real estate development fund and the cryptocurrency acquisition agreements for a digital assets-focused investment fund.
Among other things, we advise our clients on compensation (including market rates for fund management and portfolio management services, and how to structure the waterfall provision).
We assist our clients in negotiating investments into the fund, managing subscriptions and PPM controls, confirming accredited investor status, and filing the appropriate federal and state private placement filings.
Off-Shore and Cross-Border Matters
LawVisory attorneys have represented domestic and foreign sponsors/ fund managers, as well as US and foreign investors on investment fund matters. We have assisted in the establishment of foreign private investment funds, Shar’iah compliant funds, and foreign master funds (with US feeder funds), among others. Our funds have spanned the Cayman Islands, Bahamas, British Virgin Islands ("BVI"), Jersey ("Channel Islands"), Dubai, Saudi Arabia and Bahrain.
One of LawVisory’s core competencies: preparing private placement transactions, Reg A offerings and SPACs.
U.S. companies rely more on private placements to finance corporate activity that any other means of financing. LawVisory has experience in every form of private placement. We have prepared issuances under Regulation D (including Rules 504, 506(b) and 506(c)), and assisted in transfers applying Regulation S, Regulation A, Rule 144, and Section 4(a)(7).
Our professionals have engaged in a wide variety of private placements, from straightforward issuances to large negotiated private placements with counsel representing other parties. Our team members have represented start-ups, angel investors, investment advisers and financial advisors, in all kinds of financing arrangements including, corporate shares, limited liability company membership interests, convertible notes, KISSs, and FASTs.
A critical aspect of private offerings is ensuring compliance with the securities laws and mitigating foreseeable risk. Unintentional errors in the offering process may provide investors with recession of the transaction, if not more. Mishandled offerings may compel state or SEC enforcement action. LawVisory attorneys have served with regulators and self-regulatory organizations. We know what to look for and know how to properly structure private placements.
Going Public on Quotation Systems
Going public made easy
Going public on a quotation system or the pink sheets does not require the time and expense of going public on a national stock exchange. The process is simplified and can be far more cost effective, particularly when engaging calibrated and experienced legal counsel from small legal boutiques, such as LawVisory. Contact LawVisory further to find out more about the process.
Confirming the value and mitigating unwanted surprises
A due diligence investigation typically involves the legal team coordinating the due diligence of all teams, including financial and commercial/ operational, and conducting the legal due diligence. Our team members have conducted limited scope due diligence exercises, including narrow and specifically tailored due diligence exercises to large encompassing exercises. LawVisory’s clients seek to limit the transactional costs. We work with our clients to find economical means to limit the time and control the costs while discovering or confirming the critical facts.
DIGITAL ASSETS & BLOCKCHAIN SERVICES
Virtual currencies, equity tokens and utility tokens are growing in popularity. However, their checkered regulatory landscape at the state and federal level requires experienced and knowledgeable counsel to navigate the landscape. Contact LawVisory to see how our experience can assist you in your step in the cryptocurrency landscape.
We assist in planning, structuring, and implementing both utility and security ICOs
We help various clients working with initial coin offerings (“ICO”) by conducting whitepaper reviews and analyses, regulatory compliance and analysis, managing foreign counsel, preparing and negotiating agreements, building effective and compliant KYC/AML/ATF policies, procedures and programs, providing opinion letters, aiding with litigation matters, and all other services related to ICOs.
Experience and in-depth knowledge of developing Smart Contracts
We assist clients in developing smart contracts, contracts that can aid in the increased speed of transactions based upon various new forms of technology that facilitate the use of smart contracts.
Cryptocurrency Exchanges & Liquidity Providers
We represent clients that provide liquidity to the digital asset marketplace through digital currency exchanges (“DCEs”), trading desks or via applications that facilitate transactions in digital assets.
Skilled in establishing Digital Assets Banks
We work with clients at all levels from helping them to establish digital asset banks including obtaining a charter to aiding in the development and application of an effective AML/KYC/ATF compliance program. Whatever legal or compliance needs a digital asset bank may need, we can assist.
Trusted Counsel in Money Transmission regulation
Financial institutions and other money services businesses (“MSBs”) are required to filed select reports with the Financial Crimes Enforcement Network (“FinCen”). The thresholds for reporting may be periodic, based on a threshold amount or based on suspicious activity.
We advise our clients in federal and state money transmission issues, including licensing, ongoing compliance matters and other operations issues.
Unwinding the complexities of Digital Asset Taxation
Taxation for digital assets is a nascent and evolving area. In 2014, the Internal Revenue Service issued Bulletin 2014-16 (Virtual Currency Guidance) to unravel some of the complexities of “token taxation”. LawVisory attorneys have worked with specialized accountants to further simplify accounting for digital assets, including a blockchain accounting system.
We provide broker-dealers and other financial institutions comprehensive and diverse services relating to all aspects of anti-money laundering rules and regulations, including drafting anti-money laundering policies and procedures and providing annual independent testing of anti-money laundering programs.
We design and implement AML Compliance Programs
We assist broker-dealers and other financial institutions in designing and implementing AML Compliance Programs.
Perform regulator mandated Lookbacks and other transaction reviews
We assist broker-dealers and other financial institutions in conducting AML reviews and investigations.
A trusted source for independent AML Program Auditing
We perform independent testing/ auditing of AML Compliance Programs for broker-dealers and other financial institutions.
We develop and present AML training for broker-dealers and other financial institutions.
ANCILLARY CORPORATE SERVICES
We provide a number of standalone basic legal services, that are in many cases part of our other more comprehensive services.
Guide clients through the process of selling their business
LawVisory attorneys have led a number of sale of shares, sale of membership interests, and sales of assets both domestically and cross-border. Whether you are considering a sale of an entire company, or any of its divisions, assets, shares, or membership interests, LawVisory has the resources and a history of delivering results.
Building partnerships with our clients
LawVisory has extensive experience forming general partnerships, limited partnerships, joint ventures and strategic alliances (including branding platform firms). Using a business partnership and joint venture attorney is integral to forming a business partnership or joint venture that will promote your best interests in any contractual agreements.
Formation done right the first time
We assist clients in forming their limited liability companies and preparing their operating agreements. We assist in the preparation of sole member limited liability companies ("LLCs") to more complex multi-member, manager-managed and unit-based LLCs. We has set up Series LLCs, assisted in LLC phantom stock plans, and created conversion plans to corporations.
Opt-Out and Direct Action Litigation
We represent state and U.S. Securities and Exchange Commission ("SEC") registered investment advisers (RIAs), broker-dealers, investment funds and others in the investment management or financial services business in all their litigation needs.
Preparing an effective Litigation Strategy
There are a number of arrangements between clients, their registered advisors and their service providers. The LawVisory team has worked hard to keep current and at the forefront of change to ensure our advice and strategies are always relevant to the needs of the customer. A constant need to improve drives our ability to successfully litigate your matter. Assuring the best possible results to be expected from expert representation.
LawVisory litigates in the areas of securities, corporate governance and shareholder rights, antitrust, consumer protection, and data privacy law, as well as whistleblower representation.
Our expert litigation have achieved tremendous wins for our clients. We have successfully recovered millions of dollars in settlements, corporate governance reforms that protect our clients and their future investments. Backed by dozens of years building complex financial litigation has taught us that it's not only the size of the recovery that matters but a desire to help those that are in need of our expertise.
Mergers & Acquisitions
While recent developments in the financial marketplace have signaled an uptick in overall economic recovery, such activity doesn't always bode well for shareholders of public companies. An environment ripe for deal flow can also be an environment rife with misconduct. Unfortunately, recent trends in deal structures reflect an increase in efforts to minimize shareholders' rights, interests, and compensation.
Preparing for a successful transaction
Mergers and acquisitions transactions, whether large or small, have an abundance of legal and accounting complexities that need to be clearly and properly addressed. The experienced legal counsel at LawVisory is essential to any M&A transaction whether it be on the Buy-Side or Sell-Sides and for clients of all sizes, ranging from local start-ups to global conglomerates.
Cybersecurity & Information Security Compliance & Consulting
We provide our clients with all of their cyber and information security regulatory legal and compliance needs. We work with our clients ahead of time to ensure that they pass any regulatory examinations as well as help them to establish proper controls to protect their data and their client's data.
We also assist our clients with incident response and creating business continuity plans, incident response plans, and disaster recovery plans. Further, we help our clients to develop their information security policies and procedures and develop vendor risk management programs to ensure that proper due diligence is completed on vendors and the necessary protective contractual provisions are contained within our clients' vendor contracts.