Wealth & Risk Management Blog

William Byrnes (Texas A&M) tax & compliance articles

Posts Tagged ‘Private placement’

SEC Softening its Stance on Private Placements

Posted by William Byrnes on September 26, 2011


The Obama Administration’s 2012 federal budget proposal has revived two budget proposals that recent scandals have directed a slew of regulatory attention on private placement. Considering examinations of private placements recently being characterized by a FINRA executive as a “major, major initiative, it would seem strange for the Securities and Exchange Commission (“SEC”) to consider relaxing rules for marketing private placements.

Nevertheless, that’s exactly what SEC Chairman Mary Schapiro told members of Congress the agency is planning.

Speaking before the U.S. House of Representatives Committee on Oversight and Government Reform, Shapiro said that the SEC is going to “take a fresh look” at rules relating to private placements and other securities offerings, both public and private. Specifically, she said that the agency will reconsider the private placement public marketing ban and the 500-investor threshold that categorizes a company as “public.”

Read this complete analysis of the impact at AdvisorFX (sign up for a free trial subscription with full access to all of the planning libraries and client presentations if you are not already a subscriber).

For previous coverage of private placements in Advisor’s Journal, see Private Placements Becoming Much Riskier for Firms (CC 11-78) and Private Placements Becoming Much Riskier for Firms (CC 11-78).

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Private Placements Becoming Much Riskier for Firms

Posted by William Byrnes on August 14, 2011


There may be an increased need for caution when offering the newest private placements to clients. FINRA and the SEC are actively examining private placements and the firms that sell them. And if the regulators believe that something is amiss, they won’t hesitate to impose severe fines on everyone involved in the sale. As part of its ongoing sweep of firms that sold interests in failed private placements, FINRA has issued sanctions against two firms and seven individual principals of those firms. FINRA accuses them of causing significant investor losses by failing to conduct a reasonable investigation before offering the private placements for sale to investors.

Read this complete analysis of the impact at AdvisorFX (sign up for a free trial subscription with full access to all of the planning libraries and client presentations if you are not already a subscriber)

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Beware Private Placements: Lessons From MedCap, Provident and DBSI

Posted by William Byrnes on April 26, 2011


FINRA and the SEC are actively examining private placements and the firms that sell them. If the regulators believe that something is amiss, they won’t hesitate to impose severe fines on everyone involved in the sale.

FINRA has issued sanctions against two firms and seven individual principals of those firms.  FINRA accuses them of causing significant investor losses by failing to conduct a reasonable investigation before offering the private placements for sale to investors.

Read this two-page article by linking to AdvisorOne – a National Underwriters Summit Business open-access original content wealth management news portal.

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Offshore Private Placement Variable Universal Life Insurance

Posted by William Byrnes on October 2, 2010


Author: Benjamin S. Terner

Why is this Topic Important to Wealth Managers? Provides an overview of one useful tool for affluent clients.  Presents offshore private placement life insurance considerations wealth managers may consider when discussing this topic with clients.

As a brief review, private placement variable universal life insurance may allow individuals “the ability to select asset management beyond the limited asset-management choices offered in retail variable life insurance products.”

Generally speaking, one benefit derived from the use of private placement policies “in the high-net-worth market” is that the policy is essentially an “investment vehicle, optimally used for the most tax-inefficient asset classes in an investor’s portfolio.”  Therefore, some common goals for wealth managers structuring transactions as private placement life contracts: “are to take advantage of the income tax and possible estate tax savings, to maximize investment choices, and to incur as little cost as possible in doing so.”

Please see the AdvisorFYI blog for the entire blogticle.

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