This course provides an introduction to the regulation of the investment management industry, and in particular financial investment products for retail investors. The course will focus on the policies, purposes and practicalities in the regulation of mutual funds under the Investment Company Act of 1940, the regulation of investment advisers under the Investment Advisers Act of 1940 and the place of “private funds” in the federal regulatory framework.
Particular attention is paid to the structural aspects, investment objectives, marketing practices, and prospectus disclosure of mutual funds. The course also covers issues relating to the independence of investment company directors, governance rights of fund shareholders, the reasonableness of investment advisor fees and expenses, and illegal or questionable activities conducted by fund managers. The course will also address the applicability of regulation to the activities of individuals and entities, procedures for compliance, and civil liability under the antifraud provisions of the securities laws. Other topics that will be highlighted include the development of “alternative” investment products, such as hedge funds and private equity funds.