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Good Risk Governance Pays

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Category Archives: Valuation

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Customer Service and the Financial Advisory Industry

Posted in Customer Service, Risk Management, Valuation
Once a company has identified the categories of customers it wants to attract and retain, most people would agree that providing effective service is important. After all, it is hard to expand enterprise value without a healthy growth in cash flow. While this is a truism for nearly all industries, financial advisory executives are thinking hard about this topic right… Continue Reading

Unicorns, Valuation and the Search for Investment Returns

Posted in Investment Management, Liquidity, Pension, Private Equity, Valuation, Venture Capital
Thanks to Matthew Crow, President of Mercer Capital, for an interesting analysis of regional venture capital trends. In his blog post entitled “Are VC trends the canary in the RIA coal mine?” he points out that valuations in New York, Silicon Valley and Boston are deemed by many as “too high.” As a result, venture… Continue Reading

SEC and Asset Manager Disclosures About Use of Derivatives

Posted in Derivatives, Disclosure and Transparency, Investment Management, Liquidity, Regulation, Valuation
Notice anything odd about this announcement? Are we to celebrate this creamy dessert on May 21, 22, 23, 24 and 25? If so, why is the event referred to as a “day” celebration? A quick search on the internet informs that National Vanilla Pudding Day is in fact May 22, 2015 and does not span… Continue Reading

Investment Risk Management, Kanye West and Paul McCartney

Posted in Broker Dealers, Compliance, Disclosure and Transparency, FINRA, Investment Management, Liquidity, Regulation, Risk Management, Valuation
Thank heavens for the absurdities of life. A few chuckles here and there make the difference between blah and pizzazz in life. A recent example is the Twitterverse response to a recent artistic collaboration between Kanye West and Paul McCartney. Supposedly some of the members of the younger generation are unaware of this Beatle’s musical eminence. See “Genius… Continue Reading

Do CEOs Work Hard Enough?

Posted in Disclosure and Transparency, Financial Reporting, Governance, Key Person, Regulation, Valuation
By invitation of the head of the finance department, Dr. Chinmoy Ghosh, I am guest lecturing to students this fall as part of a Financial Risk Management graduate-level course. During a recent session about executive compensation – one of the topics I was asked to address – more than a few students opined that CEOs earn too much and… Continue Reading

Business Faux Pas Can Have A Long-Term Impact On Value

Posted in Governance, Investment Management, Risk Management, Valuation
Alas, for those in the United States right now, we are in the silly season once again. Politicians are wasting millions of dollars with ads that impugn their opponents instead of discussing critical problems and potential solutions. The notable take-away is that the hyperbole, annoying and far from enlightening in a real sense, can have a long-term impact… Continue Reading

SEC Examination Priorities For 2014

Posted in Broker Dealers, Compliance, Leverage, Model Risk, Regulation, Risk Management, Valuation
In case you missed it, the U.S. Securities and Exchange Commision (“SEC”) recently published its “Examination Priorities for 2014.” According to this January 9, 2014 document, important priorities include, but are not limited to, the following: Fraud detection and prevention analysis to entail the use of “quantitative and qualitative tools and techniques to seek to… Continue Reading

Real Estate Investment Trust Valuation Guidelines Published

Posted in Investment Management, Valuation
Published on April 29, 2013 by the Investment Program Association (“IPA”) Board of Directors, “Valuations of Publicly Registered Non-Listed REITs” seeks to promote transparency, uniformity and independence for investors in commercial real estate. According to the IPA website, these guidelines follow a 24-month period of discussion about how best to value non-listed Real Estate Investment… Continue Reading

Susan Mangiero Attends FI360 Insights Conference on Fiduciary Standards of Care for Investors

Posted in Fiduciary Liability, Financial Expert, Hedge Fund, Private Equity, Valuation
Protecting investors and improving the quality of investment advice were once again themes at the ninth annual fi360 Conference in Scottsdale, Arizona. With two full days of educational content covering 32 distinct topics, the event provided investment advisors with expert insights on improving fiduciaryprocedures, benefits and risks common to investment products, the current state of… Continue Reading

Dr. Susan Mangiero Speaks at Fiduciary Conference About Due Diligence for Alternative Investments

Posted in Fiduciary Liability, Valuation
I am delighted to have been invited to join the faculty of the Master’s Track at the annual fi360 investment fiduciary conference, held this year in Scottsdale, Arizona. Speakers include: (1) ERISA attorney Charles Humphrey (2) Edward Lynch, AIFA, RF, GFS with Fiduciary Plan Governance, LLC (3) Dr. Susan Mangiero, AIFA, CFA, FRM with Fiduciary Leadership,… Continue Reading

SEC Chief Announces Hedge Fund Enforcement Priorities and Fiduciary Lens

Posted in Compliance, Hedge Fund, Liquidity, Regulation, Risk Management, Valuation
Hedge funds have some new items to add to their “to do” list for 2013. In a recent talk before compliance professionals, Bruce Karpati, Chief of the Asset Management Unit (part of the Division of Enforcement of the U.S. Securities and Exchange Commission), gave the audience a roadmap to his opinions about the priorities in… Continue Reading

Investment Advisors and SEC Audit Preparation

Posted in Financial Reporting, Investment Management, Regulation, Valuation
In a timely and informative article, Shearman and Sterling attorneys Nathan Greene and Jesse Kanach talk about effective compliance as being “pivotal to a firm’s success” for registered investment advisers and investment companies.  They add that failure to pass an examination conducted by the U.S. Securities and Exchange Commission (“SEC”) – Office of Compliance Inspections… Continue Reading

SEC Enforcement of Hedge Fund Valuation Reporting

Posted in Compliance, Hedge Fund, Valuation
Adding to its enforcement actions, the U.S. Securities and Exchange Commission (“SEC”) has charged a former $1 billion hedge fund advisory firm, its founder and its chief financial officer with inflating asset values. As a result, regulators assert that pension funds and other investors were misled about the safety and liquidity of the investments and… Continue Reading

Hedge Fund Fees – More Questions

Posted in Hedge Fund, Valuation
A financial advisor approached me the other day with a question about whether his endowment client should be expected to pay a management fee on assets that are subject to lock-up and likely to be liquidated.He added “I understand that the 20% fee on any profit wouldn’t apply since there are no profits but I… Continue Reading

ERISA Pension Plans: Due Diligence for Hedge Funds and Private Equity Funds

Posted in Compliance, ERISA, Fees, Financial Expert, Fraud, Governance, Hedge Fund, Litigation, Pension, Private Equity, Risk Management, Valuation
Join me on May 1, 2012 for a timely and interesting program about alternative investment fund due diligence and other considerations for ERISA plan sponsors, their counsel and consultants. Click here for more information. This CLE webinar will provide ERISA and asset management counsel with a review of effective due diligence practices by institutional investors. Best practices… Continue Reading

$200 Million Settlement Paid Relating to Mortgage Backed Security Valuations

Posted in Broker Dealers, Compliance, Fraud, Mutual Funds, Regulation, Valuation
Investors rely on the net asset values (“NAVs”) provided to them as a way to make all sorts of financial decisions such as asset allocation, rebalancing, hedging and possibly exiting a particular money pool. In a recent case, the bear invaded the tent, eventually denying investors for several funds any illusion about security related to… Continue Reading

Financial Model Mistakes Can Cost Millions of Dollars

Posted in Financial Expert, Litigation, Risk Management, Valuation
In a recently published article about financial models entitled “Financial Model Mistakes Can Cost Millions of Dollars” (American Bar Association, Section of Litigation, Expert Witnesses, May 31, 2011), Dr. Susan Mangiero defines model risk and explains why it is so important. Referencing the recent $242 million enforcement action by the U.S. Securities and Exchange Commission as… Continue Reading

Company Stock Appraisals, ERISA Fiduciary Status and Litigation

Posted in ERISA, Fiduciary Liability, Litigation, Valuation
Employee Stock Ownership Plans (“ESOPs”) are a mainstay form of compensation according to the National Center for Employee Ownership (“NCEO”). Compiled statistics for the end of 2008 reveal that there are over 12,000 incentive and 401(k) plans with nearly 21 million participants that own stock issued by their respective employer. Given these large numbers, it’s… Continue Reading