Investment Fund Lawyer

What is an Investment Fund Lawyer?

Attorney John W. Sellers
Investment Fund Lawyer Team Lead
Former DOJ Trial Attorney

An investment fund lawyer is a specialized legal professional who provides advice on the formation, operation, and regulation of investment funds. These lawyers possess in-depth knowledge of the laws and regulations that govern investment funds, such as the Investment Company Act and the Investment Advisers Act. They work closely with fund sponsors, investment managers, and institutional investors to navigate the intricate legal landscape of the investment fund industry.

Investment fund lawyers offer a wide array of services, including advising on fund formation and structuring, negotiating investment agreements, and ensuring compliance with regulatory requirements. They also represent clients in disputes and litigation related to investment funds. Given the increasing complexity of investment fund regulations, the role of investment fund lawyers has become indispensable in ensuring that clients adhere to all applicable laws and regulations.

Our Lawyers Represent Investment Funds Throughout the U.S. and Worldwide

Investment funds are subject to extensive statutory and regulatory requirements in the United States. Both domestic and international funds must take a comprehensive and detail-oriented approach to compliance, as non-compliance can lead to intensive (and potentially costly) scrutiny from the U.S. Securities and Exchange Commission (SEC) and other agencies. At Oberheiden P.C., our investment fund lawyers understand what it takes to manage investment fund compliance effectively, and we also know what it takes to successfully defend investment funds during investigations and in litigation.

Our investment funds group encompasses a team of experienced lawyers who specialize in various aspects of investment fund law, providing comprehensive legal services to our clients.

Our investment fund lawyers’ experience includes not only representing funds and a wide range of other securities industry clients, but also conducting federal securities fraud investigations. This is because several of our lawyers handled securities fraud matters at the U.S. Department of Justice (DOJ) before entering private practice. As a result of this experience, we have first-hand knowledge of what it takes to both avoid and withstand federal scrutiny, and we rely heavily on this knowledge to provide effective legal representation to our clients.

Types of Investment Funds

Investment funds come in various forms, each with its unique characteristics and regulatory requirements. Some of the most common types of investment funds include:

Hedge Funds: These private investment funds employ a range of strategies to generate returns for investors. Hedge funds often face fewer regulatory requirements compared to other types of investment funds, allowing for greater flexibility in their investment approaches.
Private Equity Funds: These funds invest in private companies with the aim of eventually taking the company public or selling it for a profit. Private equity funds are typically subject to the Investment Company Act and other relevant regulations.
Private Investment Funds: These funds are not registered with the Securities and Exchange Commission (SEC) and generally face fewer regulatory requirements than registered investment funds. They offer a more flexible investment structure for sophisticated investors.
Sovereign Wealth Funds: Owned and controlled by governments, these funds invest in a diverse range of assets, including stocks, bonds, and real estate. Sovereign wealth funds play a significant role in global financial markets.
Business Development Companies (BDCs): These publicly traded companies invest in small and medium-sized businesses. BDCs are subject to the Investment Company Act and other regulations, providing a regulated framework for investing in emerging companies.

Dr. Nick Oberheiden

Founder

Attorney-at-Law

Lynette S. Byrd

Former DOJ Trial Attorney

Partner

Brian J. Kuester

Former U.S. Attorney

Hon. Kevin McCarthy

55th Speaker, U.S. House of Representatives (ret.)

Government Consultant

Mike Pompeo

Of Counsel

Former U.S. Secretary of State

John W. Sellers

Former Senior DOJ Trial Attorney

Linda Julin McNamara

Federal Appeals Attorney

Nicholas B. Johnson

Former Prosecutor

Roger Bach

Former Special Agent (DOJ)

Chris J. Quick

Former Special Agent (FBI & IRS-CI)

Michael S. Koslow

Former Supervisory Special Agent (DOD-OIG)

Ray Yuen

Former Supervisory Special Agent (FBI)

Our Areas of Representation

Within our funds practice, we focus our representation in four critical areas. These are: (i) formation and capitalization; (ii) regulatory and compliance; (iii) investigations and defense; and, (iv) litigation, mediation, and arbitration. While we assist many clients in each of these areas on an ongoing basis, our investment fund lawyers are also able to handle transactions, investigations, and dispute resolution proceedings on an ad hoc basis when desired.

Our areas of representation for investment funds and other clients in the securities industry include:

Formation and Capitalization of Private Equity Funds

We assist with the formation and capitalization of new investment funds and business entities. We have extensive experience in the formation and capitalization of private funds, ensuring that all legal and financial aspects are meticulously addressed. Decisions made during the formation process can have significant financial and legal implications for years to come, so it is critical to ensure that you are considering all options. Our lawyers can assist with choosing an appropriate structure; draft all of the necessary documentation; and negotiate agreements with shareholders, lenders, and other entities as necessary.

Regulatory and Compliance

A significant portion of our practice is devoted to representing investment funds and other clients with regard to regulatory matters and compliance. Our investment funds practice group is dedicated to navigating the complex regulatory environment, ensuring that our clients remain compliant with all applicable laws and regulations. At the federal level in the United States, some of the key laws and regulations that apply include:

Bank Secrecy Act (BSA)
Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank)
Employee Retirement Income Security Act (ERISA)
Sarbanes Oxley Act of 2002 (SOX)
Securities Act of 1933 and Securities Exchange Act of 1934
Regulation BI (Best Interest)
Regulation D (Rules 504 and 506)

This is just a small sampling. For investment funds, brokerage and advisory firms, and other entities involved in the securities industry, federal compliance is complex—and it can be high-risk without the right approach. Federal agencies that enforce the requirements under these laws and regulations (among others) include:

Committee on Foreign Investment in the United States (CFIUS)
Commodity Futures Trading Commission (CFTC)
Financial Industry Regulatory Authority (FINRA)
Internal Revenue Service Criminal Investigation (IRS CI)
Office of Foreign Assets Control (OFAC)
U.S. Securities and Exchange Commission (SEC)
U.S. Department of Justice (DOJ)

Our lawyers have experience working with each of these authorities on behalf of clients, in addition to working with various other authorities at the state, federal, and international levels. Whether you are in the process of establishing a new investment fund or you are responsible for an existing fund and have compliance-related concerns, our lawyers can guide you forward with confidence.

Investigations and Defense

We also provide representation for governmental investigations and defense of governmental enforcement proceedings. Our experience includes representing a wide array of institutional investors, such as family offices, in governmental investigations and defense proceedings. Statutory and regulatory violations can expose investment funds and other entities to substantial monetary fines and other penalties. When facing scrutiny from the SEC or another governmental entity, a proactive and strategic defense is paramount. We understand this and work quickly to protect our clients when necessary—with a focus on avoiding formal enforcement proceedings whenever possible.

Litigation, Mediation, and Arbitration

Along with governmental enforcement proceedings, our lawyers also represent investment funds and other clients in private litigation, mediation, and arbitration. By their nature, these cases are often extremely high-stakes and document-intensive. We have the resources and capabilities required to handle the scope of these disputes effectively, and we have a long track record of securing favorable results for our clients.

Investment Fund Governance and Operations

Investment fund governance and operations encompass the systems and processes in place to manage and oversee the activities of an investment fund. Effective governance and operations are crucial to ensuring that an investment fund is managed fairly, transparently, and in compliance with regulatory requirements.

Key aspects of investment fund governance and operations include:

Fund Formation: This involves the creation of the investment fund, including drafting the fund’s governing documents and registering the fund with regulatory authorities. Proper fund formation is essential for establishing a solid legal foundation.
Investment Management: This entails the selection and oversight of investment managers, who are responsible for making investment decisions on behalf of the fund. Effective investment management is critical for achieving the fund’s financial objectives.
Risk Management: Identifying and mitigating risks associated with the fund’s investments and operations is a key component of governance. Robust risk management practices help protect the fund’s assets and ensure long-term stability.
Compliance: Ensuring that the fund adheres to all applicable laws and regulations, including the Investment Company Act and other statutes, is paramount. Compliance programs help prevent legal issues and maintain the fund’s integrity.
Reporting and Disclosure: Preparing and disseminating reports and other disclosures to investors and regulatory authorities is essential for maintaining transparency and accountability. Accurate reporting helps build trust with investors and regulatory bodies.

Investment fund lawyers play a pivotal role in advising clients on these and other aspects of investment fund governance and operations. They help clients navigate the complex legal landscape of the investment fund industry, ensuring that their funds are managed in a manner that is fair, transparent, and compliant with regulatory requirements.

Representative Examples of Our Services

Within each of these areas, we provide a wide range of specific services to our clients. Our representation is heavily custom-tailored by design, and we focus on helping our clients identify and address their specific needs as cost-effectively as possible. With this in mind, the following is just a small sampling of the types of services we provide to our investment funds clients in the U.S. and abroad:

Structuring and formation of new investment funds and firms
Fund capital raising, due diligence, and transaction management
SEC and FINRA registration
Drafting and negotiation of shareholder agreements, executive compensation agreements, and other contracts
Drafting and negotiation of private placement memoranda (PPMs), subscription agreements, side letters, and other investment fund documentation
Negotiation of fund credit arrangements, including acquisition financing agreements and lines of credit
Portfolio transactions, spin-offs, roll-ups, and secondary market transactions
Defense of SEC and other agency investigations and enforcement proceedings
Defense of investor claims in litigation and FINRA arbitration
Litigation of commercial and corporate claims in both state and federal court

Hedge Funds and Other Clients We Represent

Our investment fund lawyers provide these services (among many others) to an extremely wide range of clients. We have extensive experience within the securities industry, and we rely on this experience to provide deep insights to clients across the entire industry spectrum. Some examples of the types of funds and other entities to which we offer our legal services include:

Alternative Investment Funds
Derivative and Structured Product Funds
Interval Funds and Other Special Purpose Funds
Investment Advisors and Broker-Dealers
Private Equity Funds, Venture Capital Funds, and Asset Management Firms
Real Estate Investment Funds and Real Estate Investment Trusts (REITs)
Registered Investment Companies

FAQs: Investment Fund Compliance, Investigations, and Litigation

What Types of Investment Funds Are Subject to Regulation in the United States?

Essentially all types of investment funds are subject to regulation in the United States. This includes private equity funds, venture capital funds, energy and infrastructure funds, real estate funds, commodities funds, reinsurance funds, “funds of funds,” among many others. If you own or operate an investment fund, or if you are thinking about starting an investment fund, you will need to consult with an experienced investment fund lawyer to ensure that you are doing everything that is required.

What Are Some of the Primary Compliance Obligations of Investment Funds?

Some examples of investment funds’ primary compliance obligations include providing adequate disclosures, maintaining adequate documentation, and conducting effective due diligence. Of course, within each of these three broad categories, there are numerous specific requirements with which investment funds need to comply. Due to the breadth and complexity of investment funds’ compliance obligations, it is critical to work with an experienced investment fund lawyer who can guide you forward.

How Can Investment Funds Effectively Manage Regulatory Compliance?

For investment funds, effectively managing regulatory compliance starts with gaining a clear and comprehensive understanding of the fund’s specific compliance obligations. Different obligations apply in different circumstances. Once you know what you need to do in order to satisfy all applicable statutory and regulatory requirements, then you can shift your focus to generating the necessary compliance documentation, providing internal training, and implementing an ongoing compliance monitoring and enforcement program.

How Can an Investment Fund Lawyer Help Investment Advisers?

An experienced investment fund lawyer should be able to help with all aspects of managing an effective compliance program. An experienced lawyer should also be able to assist with proactively identifying potential issues, conducting risk assessments, responding to threats, and communicating with regulatory authorities on your fund’s behalf. While operating an investment fund can be extremely lucrative, it can also be high-risk, so a knowledgeable, structured, and compliance-focused approach to the fund’s operations is essential.

What Should I Do if I Have Been Contacted by the SEC Regarding an Investment Fund?

If you have been contacted by the SEC regarding an investment fund, you should engage experienced legal counsel promptly. The SEC regularly investigates investment funds and other entities suspected of non-compliance, and allegations of non-compliance can lead to steep penalties. An experienced investment fund lawyer will be able to intervene in the SEC’s investigation, work with the SEC’s personnel on your behalf, and help steer the inquiry toward a favorable and quiet resolution.

Speak with an Investment Fund Lawyer at Oberheiden P.C.

Would you like to know more about our investment fund practice? If so, we encourage you to get in touch. We will be more than happy to schedule a time for you to speak with one of our senior investment fund lawyers in confidence. To arrange a complimentary initial consultation at Oberheiden P.C., please call 888-680-1745 or tell us how we can reach you online today.