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Basics of Mutual Funds and Other Registered Investment Companies 2014


Speaker(s): Bibb L. Strench, Clifford E. Kirsch, Edward Baer, George O. Martinez, Gregory N.. Bressler, James C. Munsell, Kathryn L. Quirk, Laurin Blumenthal Kleiman, Lori A. Martin, Mark Holland, Mary Joan Hoene, Robert C. Grohowski, Ronald A. Holinsky, Shannon Behara
Recorded on: Apr. 23, 2014
PLI Program #: 51320

JIM MUNSELL is a partner in Sidley’s New York office. He counsels investment advisers and investment funds in connection with a broad range of corporate, securities, derivatives and regulatory matters. Jim’s clients range from small, closely held start-up investment management businesses to the investment management divisions of global financial institutions. He was involved in the successful development and launch of the first commodity pool to be listed on a securities exchange in the United States and continues to work on innovative exchange-traded funds (ETFs). 

Jim is part of Sidley’s Investment Funds, Advisers and Derivatives practice team that has won numerous top awards as a provider of legal services to the private funds industry: two-time winner of Chambers and Partners’ “Investment Funds Team of the Year for the U.S.”; Institutional Investor’s Alpha magazine’s 2014 Alpha Awards top “onshore” (U.S.) law firm serving the hedge fund industry; four-time recipient of first-tier national rankings in the U.S. News – Best Lawyers “Best Law Firms” rankings for Private Funds/Hedge Funds Law, and Derivatives and Futures Law; and ranked in the top band for Hedge Funds by Chambers USA every year since 2008. Additionally, Jim is recognized in the 2013–2015 editions of The International Who’s Who of Private Funds and is recommended in The Legal 500 for mutual/registered funds and private equity funds. He is also a winner of an ETF Award, which highlights the outstanding performance and results achieved by corporate leaders. 

Jim is a member of the New York City Bar Association and served on the Committee on Futures and Derivatives Regulation from 2009–2012 and as the chairman of the CPO/CTA Subcommittee from 2010–2012. Additionally in the New York City Bar Association, Jim served as a member of the Committee on Investment Management Regulation from 2012–2015.

Jim received his J.D. from Fordham University, and his B.A. from Lawrence University.


Shannon joined ACA in 2005. As a Partner in the Boston office, she provides regulatory and compliance consulting services to investment companies, private funds, and investment advisers. She advises clients on designing, drafting, and implementing customized compliance programs. Shannon also performs mock examinations, procedural reviews, and customized forensic testing audits to evaluate compliance with federal securities laws. In her work, she specializes in the complexities of fixed-income markets and structured securities. More recently, Shannon has worked extensively with sponsors and sub-advisers of liquid alternative registered investment companies in understanding the complexities of the Investment Company Act of 1940 and its application to non-traditional investment types and methods.  Shannon also works with a number of business development companies.  As a prominent expert on compliance issues, she also speaks frequently at conferences and has provided content and comments to industry periodicals and publications.

Shannon began her regulatory career in 2001 as a Securities Compliance Examiner with the Boston District Office of the Securities and Exchange Commission. During her SEC tenure, she led or participated in examinations of investment companies, investment advisers, hedge funds, transfer agents, and variable insurance products. She also performed extensive work on several market-timing, late-trading, and directed-brokerage cases that involved close coordination with the SEC’s Division of Enforcement.

Prior to joining the SEC, Shannon served as a Senior High Yield Analyst for Bridge Information Systems. During her time at Bridge and its predecessors, she performed analytical pricing and covenant analysis on a wide variety of fixed-income issues, including asset-backed debt, U.S. and Euro medium-term notes, and investment-grade and high-yield corporate debt.

Shannon graduated from the University of Central Oklahoma with a Bachelor of Business Administration in Finance. She also holds a graduate certificate in Forensic Accounting from Northeastern University.


Overview

Bibb Strench is a partner in the Corporate Transactions & Securities practice group. He focuses on exchange-traded funds (ETFs), closed-end funds, mutual funds and investment advisers. He leads the firm’s award winning ETF practice, representing ETF issuers, ETF platforms and independent trustees of ETF issuers. 

Bibb provides advice on regulatory, compliance, entity formation, auditor independence, corporate governance and other issues related to the operation of the aforementioned businesses. He has experience with unique fund structures including funds with alternative investment strategies, faith-based restrictions and multi-tier levels.

Bibb began his career as a staff attorney in the Division of Investment Management of the U.S. Securities and Exchange Commission, where he witness the granting of the first ETF exemptive order. He has argued 1940 Act issues in federal and state courts, including the landmark mutual fund independent director case, Yacktman v. Carson, et al, and participated in the development of the Uniform Statutory Trust Entity Act.


Cliff Kirsch began his career at the U.S. Securities and Exchange Commission (SEC), became chief legal officer for one of the country’s largest dually- registered broker-dealer/advisers and then joined Sutherland (now Eversheds Sutherland) in 2006. He relies on his regulatory and in- house background and an up-to-date knowledge of regulatory developments to provide practical and innovative counsel to broker-dealers and investment advisers in the areas of securities regulation and compliance.

With more than 25 years of experience, Cliff regularly counsels clients on the design and distribution of investment products including wrap-fee programs and other advisory products, mutual funds, bank collective investment funds and insurance products. He also focuses on issues related to the design and implementation of compliance programs at financial services firms.

While at the SEC, Cliff received the Manuel F. Cohen Award, which recognizes younger lawyers who have displayed outstanding legal ability, integrity and judgment and he served as assistant director of the SEC's Division of Investment Management.

Cliff is a frequent speaker at industry conferences, and is the author and editor of two of the leading treatises in the broker-dealer and adviser arena: Broker-Dealer Regulation and Investment Adviser Regulation (published by the Practising Law Institute).

Cliff is also co-founder of the Julia Anne Kirsch Foundation, which seeks to serve the needs of disabled individuals and their families.

Experience

Eversheds Sutherland counsels a coalition of major life insurance companies on evolving state and federal regulations and other legal developments.

Eversheds Sutherland represents a coalition of major life insurance companies, which collectively account for more than 80% of the annuity business in the United States, in their efforts to affect the direction and details of various SEC, FINRA, CFTC, NAIC and state rule proposals and initiatives.

Eversheds Sutherland serves as outside counsel on broker-dealer and adviser regulatory issues for one of the largest independent broker-dealer networks in the country.  Eversheds Sutherland serves as regular primary outside counsel on broker-dealer and adviser regulatory issues for one of the largest independent broker-dealer networks in the country.

Eversheds Sutherland represents coalition of collective trust fund sponsors, advisers and other service providers.

Eversheds Sutherland serves as counsel to the Coalition of Collective Trust Funds. Among other things, Sutherland monitors and reports on legal and regulatory matters affecting collective trust funds.

Professional Activities

Member, New York City Bar Association

Faculty, FINRA Compliance Institute at The Wharton School of the University of Pennsylvania

Former Chair, FINRA Variable Products Committee

Former Board Member, National Society of Compliance Professionals


Edward Baer is counsel in Ropes & Gray's investment management practice in San Francisco. His practice focuses on advising exchange-traded funds (ETFs), open- and closed-end investment companies, and their independent directors/trustees. He has deep experience in operational, governance, compliance, regulatory and business issues related to ETFs and other investment companies and asset managers. He also has experience advising clients on investments in cryptocurrencies, including bitcoin, ether and other coins and tokens, initial coin offerings (ICOs) and simple agreements for future tokens (SAFTs), cryptocurrency fund formation and related custody issues.

Prior to joining Ropes & Gray in 2016, Ed was managing director and senior counsel for the world’s largest asset manager, and also served as chief legal officer for the world’s largest ETF complex. In that role, he oversaw the full range of legal and compliance matters for over 300 ETFs, including index and active 1940 Act ETFs and non-1940 Act physical metals and futures-based commodities ETFs, with assets under management of approximately $800 billion. Ed and his team were responsible for all legal aspects of the operation of the ETF complex, including:

  • registration of ETFs under the 1933 Act and 1940 Act;
  • fund governance and board matters;
  • ·new ETF product development, including novel products such as a 1940 Act-registered commodity index ETF, a frontier markets ETF, currency and interest rate hedged ETFs and “smart beta” ETFs;
  • ETF exemptive relief and exchange listing and trading relief;
  • ETF creation and redemption activities; and
  • ETF distribution, marketing and index licensing.

Ed also advised on acquisitions and other strategic business matters, global valuation issues, and regulatory affairs, as well as on numerous other legal and compliance matters.

Prior to his in-house role, he held positions at two large law firms where he focused his practice on counseling clients on issues arising under the 1940 Act and advising mutual funds on organization, registration, operations, governance and regulatory matters.


George Martinez is a Global Relationship Manager at BNP Paribas Securities Services, where he has responsibility for managing the relationships of the group’s top-tier US asset manager clientele.

George has been in the financial services industry for over 25 years, having commenced his career at the SEC’s Division of Investment Management as a Senior Attorney.  Prior to joining BNP Paribas in 2013, George was with JP Morgan as a member of its relationship management team covering asset managers.  Prior to transferring to relationship management at JPMorgan, he was head of Fund Administration Operations for JPMorgan where he was responsible for providing financial reporting, compliance, treasury and legal services to clients’ mutual funds and hedge funds. Previously, he headed up fund administration operations for Citigroup and State Street Corporation and was the National Director of Arthur Andersen’s Investment Management Regulatory Practice.  In addition, George launched the industry’s first online mutual fund Board portal, fundwatchdog.com, in 2001 as well as serving as an Associate General Counsel at Alliance Capital (now AllianceBernstein) after leaving the SEC.

George has a JD from Boston University School of Law and an LLM in Securities Regulation from

Georgetown University Law Center. He previously served as Co-Chair of the Legal and Regulatory

Committee of the National Investment Company Services Association and is a member of the

Association of SEC Alumni and the New York Bar. He is a frequent speaker at conferences on issues impacting the investment management industry.


Gregory N. Bressler serves as General Counsel of SunAmerica Asset Management, LLC and Chief Counsel for the AIG Consumer Distribution organization supporting the domestic retail distribution of Life & Retirement products.  Before joining SunAmerica in 2005, Mr. Bressler served as Director of U.S. Asset Management Compliance for Goldman Sachs Asset Management, L.P. and Deputy General Counsel for Credit Suisse Asset Management, LLC.  He began his legal career with Werner & Kennedy before joining Swidler Berlin Shereff Friedman, LLP.

Mr. Bressler has spoken at conferences in the financial services areas, including topics relating to private funds, registered investment companies, investment advisers and broker-dealers.  He has also written articles concerning these topics, including articles published in The Investment Lawyer and The Review of Securities & Commodities Regulation.

Mr. Bressler is a graduate of State University of New York at Binghamton, B.S., magna cum laude, and Vanderbilt University School of Law, J.D., where he served as Managing Associate Justice of the Moot Court Board and today serves on the Board of Advisors.


Laurin Blumenthal Kleiman is a global co-leader of Sidley’s Investment Funds, Advisers and Derivatives practice team. She advises a wide range of domestic and international investment funds and managers on regulatory, compliance and enforcement issues. Laurie is a frequent speaker on investment manager and fund regulation and compliance as well as on issues relating to the advancement of women in law.

Strong advocacy on behalf of her clients has earned Laurie acknowledgment in numerous industry publications, including Chambers USA, The Legal 500 and U.S. News & World Report. She is recognized in the area of Mutual Funds Law by The Best Lawyers in America®, with sources telling the publication: “Ms. Kleiman has been extremely professional and knowledgeable in her service to our firm. We trust her advice explicitly” and “[Laurie] is a true expert in her area, and remarkably commercial and practical.” Laurie was named to Crain’s New York Business’ inaugural “Leading Women Lawyers in New York City” list, where she was lauded as being among the 100 “trailblazing women” who have “found multiple paths to excellence” and have displayed “fierce determination, passion for the law, keen intelligence, and inspiring achievement.” Laurie also was named one of the “50 Leading Women in Hedge Funds” by the Hedge Fund Journal.

Laurie is an active proponent of advancement of women in the legal profession. She is firmwide co-chair of Sidley’s Committee on Retention and Promotion of Women, oversees the SidleyWomen initiative, and is chair of Sidley’s Executive Committee Task Force. Sidley has been recognized repeatedly for its groundbreaking women’s initiatives, including being named one of the “50 Best Law Firms for Women” by Working Mother Magazine nine times, receiving gold certification by the Women in Law Empowerment Forum (WILEF) seven times, and receiving, among others, “Most Inclusive Firm for Minority Women Lawyers” and “Outstanding Firm in Advancing Gender Diversity and Inclusion” honors from Chambers. Laurie is a frequent speaker on women’s issues, is a member of the WILEF advisory board and was named “2016 Gender Diversity Lawyer of the Year” by Chambers. She is also a member of the firm’s risk management committee.

Education

  • Vanderbilt University Law School (J.D., 1983, Editor, Vanderbilt Law Review)
  • Vanderbilt University (B.A., 1980)


Lori A. Martin is partner in the Securities and Litigation/Controversy departments of WilmerHale, where she is resident in the New York office. She handles regulatory proceedings and litigation on behalf of investment advisers, open and closed-end investment companies, hedge funds, and broker dealers offering investment advisory services. She was selected as the “Mutual Funds Law Lawyer of the Year” in the New York area by The Best Lawyers in America® 2014. Prior to joining WilmerHale, she was First Vice President and Assistant General Counsel of Merrill Lynch Investment Managers.

Her publications include: “Litigation Under the Investment Company Act of 1940,” Vol. 2, Chapter 26 Mutual Fund Regulation (Practicing Law Institute, 2017) (Clifford E. Kirsch, ed.); “Supreme Court Endorses Gartenberg, But It's Not the Same Old Standard,” WilmerHale Client Alert (April 5, 2010) (with Matthew A. Chambers); “Enforcement Trends and Themes,” Investment Management Institute (Practicing Law Institute, 2007-2012); “State Regulators and the Mutual Fund Industry,” 39 The Review o/Securities & Commodities Regulation 219 (Nov. 15, 2006) (with Cristina Alger); and “Emails and the Recordkeeping Obligations of Investment Advisers,” 12 The Investment Lawyer 16 (February 2005).

Ms. Martin's recent speeches include: “Excessive Fee Litigation, Contract Renewal and Share Class Developments,” panel presentation at the PLI Basics of Mutual Funds and Other Registered Investment Companies 2018 conference (New York, New York) (May 14, 2018); “Investment Management:  Enforcement and Litigation Trends,” panel presentation at the PLI Investment Management Institute 2018 conference (New York, New York) (April 30, 2018); “Key Legal and Regulatory Issues:  Asset Management,” panel presentation at the SIFMA Compliance & Legal Regional Seminar (Boston, Massachusetts) (June 7, 2017); and “Valuation Issues, SEC Examinations & Enforcement Actions,” panel presentation on a webinar co-sponsored by Deloitte & WilmerHale (June 19, 2013).

Ms. Martin graduated with honors from the University of Chicago School of Law in 1988, where she was a member of the University of Chicago Law Review. She graduated with honors from Wellesley College in 1985.


Mark Holland is a partner in the firm's Litigation Department and a member of its Securities Litigation & SEC Enforcement Practice. He joined Goodwin Procter in 2009.

Work for Clients

Mr. Holland has over 30 years of experience defending securities class actions and shareholder derivative suits. He is one of the most experienced mutual fund litigators in the country. He also has extensive experience defending issuers, underwriters and directors  in public offering litigation and securities fraud litigation.

Mr. Holland has represented investment advisors and directors in a wide variety of litigation under the Investment Company Act  of 1940 and related statutes. He successfully argued the leading case holding that no implied private rights of action exist under the 1940 Act, Olmsted v. Pruco Life, 283 F.3d 429 (2d. Cir. 2002.  In one of the leading cases involving merger s and acquisitions of investment managers, he defeated shareholder challenges under  the 1940 Act to the merger of Mellon Bank and Dreyfus, Olesh v. Dreyfus 1995 WL 500491 (EDNY 1995), and more recently defended the merger of Citigroup’s and Legg Mason’s investment management businesses in Garber v. Legg Mason, Inc. 347 Fed. Appx. 665 (2d Cir. 209). He argued and won the first cases holding that mutual fund shares are subject to the Securities Litigation Uniform Standards Act (“SLUSA”), Riley v. MLPF&S, 292 F.3d 1334 (11th Cir. 2002).  He defended Alliance Bernstein in civil litigation arising out of market timing allegations, In re Mutual Funds Investment Litig., 04 MDL 1586 (D. Md. 2004); Merrill Lynch Investment Management in class actions arising out of purportedly conflicted analyst research reports, In re Merrill Lynch & Co. Research Reports Litig., 272 F.Supp. 2d 243 (SDNY 2003); and the Independent Trustees of the Reserve Primary Fund in litigation brought in connection with that fund’s “breaking the buck” September 2008, In re The Reserve Fund Sec Litig., 1:09 MD 2011 (SDNY). In the excessive fees area, he argued and won summary judgment dismissing conflict of interest allegations under Section 36(b) of the 1940 Act in Green v. FAM, 286 F.3d 682 (3d Cir. 2002);  served as lead counsel for Merrill Lynch  and Alliance Bernstein  in obtaining dismissal of revenue sharing allegations under Section 36(b) in In re Alliance Bernstein Mut. Funds Litig., 2006 W.L. 74439 and In re MLIM Funds SecLitig., 434 F. Supp. 2d 233 (SDNY 2000), and has represented the Independent Directors of the Franklin-Templeton Funds and the Hartford Funds in Section 36(b) cases.

Mr. Holland also has defended many of the country’s major financial institutions in some of the most significant  securities litigations of the past decade, including: representing Merrill Lynch in  coordinated class actions alleging market manipulation in connection with over 300 technology IPOs, In re IPO Sec. Litig., 471 F.3d 24 (2d Cir. 2006); representing Citigroup in class action litigation arising out of the collapse of Parmalat, In re Parmalat, 376 F.Supp 2d 472 (SDNY 2005); and representing Bank of America/Countrywide  in litigation brought by monoline insurers arising out of the mortgage market meltdown, including MBIA vCountrywide, 87 A.D. 3d 287, 928 N.Y.S. 2d 229 (1st Dep’t 2011).

Professional Activities

Mr. Holland serves on the Committee on Investment Management Regulation of the New York City Bar and previously served on the Committee on Securities Litigation.

Professional Experience

Prior to joining Goodwin Procter, Mr. Holland was a partner in the New York office of Clifford Chance, where he served as co-head of the U.S. Securities and White Collar/Regulatory Practice Group.

Recognition

In 2010, Mr. Holland was named Independent Counsel of the Year at the 17th Annual Mutual Fund Industry Awards ceremony, sponsored by Fund Action and Fund Directions. He repeatedly has been recognized by Chambers USA as one of the leading individuals in securities litigation in New York and nationwide. He has spoken at numerous industry conferences and CLE seminars on securities and mutual fund litigation.


Ms. Hoene is a recognized securities and investment management attorney with diverse experience in the financial services industry, and particular expertise with the Investment Company and Investment Advisers Acts of 1940. She works with fund sponsors, investment advisers, broker-dealers, commodity trading advisors, ETFs, registered and private funds, banks, insurance companies and the independent directors of investment companies.

She has held senior positions with several financial service institutions, including acting as Independent Fund Chief Compliance Officer at Bank of America, where she was responsible for establishing and defining the fund compliance program for mutual fund families aggregating more than $200 billion in assets, following the bank’s merger with FleetBoston Financial Corp.

Ms. Hoene also served as the first Deputy Director of the Securities and Exchange Commission’s Division of Investment Management, managing the disclosure, chief counsel, investment adviser and EDGAR pilot programs, and coordinating policy positions in legislative, self-regulatory and state matters, inspection and enforcement, and overall Division policy.

Practice Areas

Securities
Corporate
Financial Institutions Regulatory and Enforcement

Education

  • B.A., 1970 Seattle University (English)
  • J.D., 1975 University of Notre Dame School of Law


Bob Grohowski is a Senior Counsel with the Investment Company Institute, with primary responsibility for a wide range of issues arising under the Investment Company Act of 1940 and the Investment Advisers Act of 1940. He has been the Institute’s lead attorney on a number of key issues, including the SEC’s 2010 proposal to reform Rule 12b-1 and its 2011 concept release on funds’ use of derivatives. He was also the primary author of several Institute papers on fund pricing and valuation.

Bob has been with the Institute since January 1998. He began as a staff attorney in international affairs, and was named Senior Counsel of that group in July 2005. During that time, Bob also served as the Institute’s lead attorney on anti-money laundering compliance issues, and in 2004 was named to the Bank Secrecy Act Advisory Group (BSAAG), a government/industry task force established by Congress in 1994 for the purpose of giving the US Treasury Department advice on strengthening anti-money laundering programs and simplifying currency reporting forms.

Bob was in private law practice before joining the Institute in 1998, first with Kilpatrick & Cody (now called Kilpatrick Townsend) in Atlanta and then with Sutherland, Asbill & Brennan in Washington, D.C.

Bob received a BA in Foreign Affairs from the University of Virginia. He also received his law degree from the University of Virginia, where he was a member of the editorial board for the Virginia Journal of International Law.


Kathryn L. Quirk is Head of US Regulatory Compliance for Goldman Sachs Asset Management.  She was, until December 2012,  Deputy Chief Legal Officer for Asset Management, co-Chief Legal Officer for Prudential Investment Management, Inc. and Chief Legal Officer for Prudential Investments LLC and the Prudential Investments Mutual Funds.  Kathryn joined Prudential Financial in 2004. Prior to joining Prudential, she was with Zurich Scudder Investments, Inc. (formerly Scudder, Stevens & Clark) where she served as a member of the management committee, General Counsel, Chief Compliance Officer, Chief Risk Officer, Corporate Secretary, and Managing Director.


Ron Holinsky serves as Vice President, Chief Compliance Officer & Assistant General Counsel for Lincoln Financial Group, having joined Lincoln Financial in September 2013. In that role, he serves as the enterprise chief compliance and ethics officer for Lincoln Financial.  Prior to that, he served as Vice President & Deputy General Counsel for Janney Montgomery Scott LLC, as well as Chief Legal Officer for its investment adviser subsidiary, Janney Capital Management LLC.  Prior to Janney, he served as Associate General Counsel for Legg Mason, senior associate for K&L Gates and senior counsel for the SEC’s Division of Investment Management and Office of Compliance Inspections and Examinations. He is a graduate of West Virginia University’s business school and University of Baltimore School of Law, evening division. Mr. Holinsky has nearly 20 years of regulatory legal and compliance experience and leadership in the securities and financial services industries.