The latest chapter in our Practical Guide to the Regulation of
Hedge Fund Trading Activities has been released. Chapter 3:
Special Issues Under Sections 13(d) and 16
summarizes the filing requirements and liability provisions
that continue to challenge hedge funds, due to the sometimes opaque
law and complex trading patterns. We discuss both sets of
requirements, because in our experience that is how real world
issues tend to materialize and are resolved.
The scope of both Section 13(d) and Section 16 may cover a
person whose holdings and those of its affiliates do not by
themselves exceed the 5% or 10% thresholds. That can occur if the
investor is part of a Section 13(d) "group" that acquires
beneficial ownership of all of its members' equity in the
aggregate (or, in some cases, that is deemed to be a
"director-by-deputization" through a representative
serving on the issuer's board of directors).
