Publications

New Anti-Fraud Rule Under the Investment Advisers Act of 1940

Fall 2007
Marc E. Elovitz
Investment Management Developments - Fall 2007

The Securities and Exchange Commission (the “SEC”) on Aug. 3, 2007, issued a release (the “Adopting Release”) adopting the new investment adviser anti-fraud rule it had proposed on Dec. 27, 2006. Rule 206(4)-8 (the “Rule”) under the Investment Advisers Act of 1940 (the “Advisers Act”) makes it a fraudulent, deceptive or manipulative act, practice or course of business within the meaning of Section 206(4) of the Advisers Act for an investment adviser of a “pooled investment vehicle”: (a) to make any false or misleading statements or to omit any material fact to an investor or prospective investor in a pooled investment vehicle; or (b) to otherwise engage in any fraudulent, deceptive or manipulative act with respect to an investor or prospective investor in the pooled investment vehicle.