Florida Investment & Securities Lawyer
Call to Schedule a Consultation

Florida Hedge Fund & Private Equity Lawyer

The hedge fund industry is well over the $2 trillion of the world market. It’s size and influence cannot be ignored by the economy or the markets.

The Dodd-Frank Wall Street Reform and Consumer Protection Act, Title IV, requires advisors who manage hedge funds and private equity funds to report more information than had been previously required, particularly relating to their systems for monitoring financial risk and fiduciary duty to investors. Hedge funds also now have the risk of an SEC investigation or complaint and bases for investor claims. Contact our Florida Hedge Fund & Private Equity lawyer for more information or assistance.

In most cases, advisors to Hedge Funds and Private Equity Funds must now register with the SEC under the Investment Advisors Act of 1940, making them fiduciaries. This adds transparency for investors and investors may also gain leverage from the new status of hedge funds. There will be certain required disclosures by “gatekeepers” too, i.e., lawyers, custodians, auditors, administrators, prime brokers, and marketers. Background information on people working at the fund will be increased, as will be use of affiliated brokerage firms. The purpose is to be able to transparently look at compensation for referrals and soft dollar commissions.

The goal of the new regulations is to stop conduct that may harm investors, deter fraud, and enable earlier discovery of potential misconduct.Hedge funds tend to be highly specialized, relying on expertise of specific managers or a management team. Investment strategies which use leverage and derivatives are more speculative while others are more conservative and employ little or no leverage.

Hedge funds have different investment returns, volatility and risk. Some strategies can deliver consistent returns with low risk of loss, but others are more volatile than mutual funds. The due diligence a brokerage firm must do before recommending a hedge fund should be extensive and is essential, and should include asking probative questions, reviewing pertinent documents and making sure that representations made to customers are accurate with the funds risk style, track record, investment and management philosophy, all of which need to be continuously reviewed by a broker/brokerage firms to monitor and make sure the hedge funds they recommend stay on track.

High incentive fees, split by the broker selling a fund and the hedge fund manager is often a reason for the failure of hedge funds. Often, incentive fees cannot be collected if the investor is losing, not re-starting until the assets lost are regained and surpasses its high point from the prior year. This sometimes causes high turnover at the fund and extraordinary risk-taking to get back to incentive fee status.

Contact Experienced Florida Hedge Fund & Private Equity Lawyer

When you want to mediate or litigate a securities dispute, call Gregory Tendrich, P.A. at 561-327-7782 or contact the firm online to schedule your complimentary consultation. Gregory Tendrich understands what is at stake for you.

Share This Page:
Gregory Tendrich, PA
Gregory Tendrich, P.A. serves clients throughout Florida, including the cities of West Palm Beach, Palm Beach, Delray Beach, Boynton Beach, Boca Raton, Port St. Lucie, Lake Worth, Wellington, Riviera Beach, Palm Beach Gardens, Fort Pierce, Vero Beach, Hobe Sound, Jupiter Island, North Palm Beach, Lake Park, Lantana, Stuart, Palm City, Jensen Beach, Tequesta and Juno Beach and represents clients in Palm Beach County, Martin County, St. Lucie County, Indian River County and throughout Florida.

Our Location

3010 N. Military Trail, Suite 210
Boca Raton, FL 33431

Telephone: 561-417-8777
Fax: 561-417-8700

The information you obtain at this site is not, nor is it intended to be, legal advice. You should consult an attorney for individual advice regarding your own situation.

No content on this site may be reused in any fashion without written permission from www.YourStockLawyer.com

MileMark Media - Practice Growth Solutions

© 2015 - 2018 Gregory Tendrich, P.A. All rights reserved.
This law firm website is managed by MileMark Media.

Contact Form Tab