Funds Talk: November 2018

Topics covered in this issue include: 

• Virtual Currencies are commodities: Federal Court
  A further piece of the regulatory puzzle for virtual currencies appears to be falling into place, as a federal court rules on the question of whether such currencies are commodities and subject to regulation by the Commodity Futures Trading Commission.
  
  
• Litigation Funding: An Increasingly Popular Investment Vehicle
  Litigation funding has grown in popularity among U.S. alternative asset managers, as demand from litigants has increased. For investors, the scale and timing of potential returns are attractive, although increasing regulatory and legislative scrutiny is an area to watch.
  
  
• Crypto: What the Regulators Are Planning to Do
  

  In an Oct. 24, 2018, article, HFMCompliance recapped the key terms, issues and takeaways from Kramer Levin’s seminar, Legal Issues in Cryptocurrencies for Funds, which was held on Oct. 10. The panel discussion, led by Corporate partners Christopher S. Auguste and Kevin P. Scanlan, gave a brief introduction to cryptocurrencies and their underlying technology, as well as a primer on legal and regulatory issues.
  
  

• New York State Issues Final Sexual Harassment Guidance Documents and Extends Training Deadline
  

  As we previously reported, effective Oct. 9, 2018, New York State employers are required to adopt and distribute a written sexual harassment prevention policy and annually conduct interactive sexual harassment prevention training. Following the publication of our prior alerts, the state issued a number of final guidance documents on Oct. 1, 2018. Such final documents include a model policy, model training documents, a model complaint form, FAQs and additional guidance.

• SEC Report Warns of Potential Internal Controls Enforcement Actions Against Cyber Fraud Victims
  On Oct. 16, the Securities and Exchange Commission (SEC) issued an investigative report warning that public companies victimized by cyber fraud could also face enforcement action for violating federal securities laws by failing to maintain sufficient internal accounting controls. While the SEC earlier this year issued interpretive guidance for public companies concerning the disclosure of cybersecurity risks and incidents, the SEC’s recent report stresses the importance of companies having a sufficient system of  internal controls to prevent cyber fraud.