Joshua M. Newville
Partner
Joshua M. Newville is a partner in the Litigation Department in New York and a member of Proskauer's White Collar Defense & Investigations Group and the Asset Management Litigation team.
Josh handles securities litigation, enforcement and regulatory matters, representing corporations and senior executives in civil and criminal investigations. In addition, Josh advises registered investment advisers and private fund managers on regulatory compliance, SEC exams and related risks.
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On July 3, 2019, SEC Chairman Jay Clayton issued a “Statement Regarding Offers of Settlement” (the “Statement”), announcing important changes to how the SEC will consider future requests for waivers from disqualifications in settlements. The Statement may have been prompted by the Bad Actor Disqualification Act of 2019 recently proposed by Representative Maxine Waters. Regardless … Continue Reading
A recent action where the SEC focused on the presumably conservative undervaluation of assets suggests that it is more than willing to use valuation as a hook to deter “smoothing” of returns. As we previously noted, while the SEC consistently announces that valuation is a “key area of focus,” it is uncommon for regulators to … Continue Reading
The DC Circuit recently released an opinion addressing the SEC’s administrative findings against registered investment adviser The Robare Group (TRG) for failure to disclose alleged conflicts of interest. Although the court affirmed the SEC’s finding of a violation of Section 206(2) of the Advisers Act, it held that Commission could not find willful violations under … Continue Reading
Last week the SEC announced a settlement of fraud claims against the founder of Jumio, Inc, a private mobile payments company, for misstating the company’s financial results and using those financials to sell his company shares on the secondary market. This case is a reminder that privately negotiated securities transactions and private, VC-funded companies are … Continue Reading
An increasingly sophisticated and active OCIE division, innovative market disruptors, a maturing credit cycle, and a philosophical change in how the private fund industry views and utilizes litigation are likely to lead to increased regulatory scrutiny and litigation risk for advisers (and their funds) in 2019. With that backdrop, we are pleased to present our … Continue Reading
While the SEC consistently announces that valuation is a “key area of focus,” it is uncommon for regulators to “second guess” valuation determinations in the absence of other potential violations. However, recent actions would suggest that the SEC is particularly interested in the valuations and methodologies behind illiquid securities. As we have noted here before, … Continue Reading
On Friday, the WSJ published an article detailing how companies are monetizing smartphone location data by selling it to hedge fund clients. The data vendor featured in the WSJ article obtains geolocation data from about 1,000 apps that fund managers use to predict trends involving public companies. However, as we’ve noted, the use of alternative … Continue Reading
Former SDNY U.S. Attorney Preet Bharara and SEC Commissioner Jackson recently announced, via NY Times op-ed, the creation of the Bharara Task Force on Insider Trading. Based on the premise that U.S. insider trading laws are unclear and hopelessly out of date, the task force intends to propose new insider trading reforms to help clarify … Continue Reading
Fund managers take note – after over a year of warning, this month the SEC announced a pair of settlement orders with respect to registration requirements for a fund and broker dealer operating in the crypto and digital assets space. It was the agency’s first ever enforcement actions applying the investment company and broker-dealer registration … Continue Reading
The theft of millions of bitcoins and related failure of cryptocurrency exchange Mt. Gox—recently written about in the Wall Street Journal—provides a perfect example of how cryptocurrency-related issues can blossom into one of our Top Ten Regulatory and Litigation Risks. The WSJ article chronicles the journey of Kim Nilsson—one of the victims of the $400 … Continue Reading
On June 4, we posted a summary of SEC Enforcement Co-Director Steven Peikin observations during his recent keynote address at the New York City Bar Association’s 7th Annual White Collar Crime Institute. Co-Director Peikin imparted a few suggested “do’s and don’ts” for effective communication with the SEC during the Wells process. Although Co-Director Peikin’s suggestions should serve as helpful … Continue Reading
During his recent keynote address at the New York City Bar Association’s 7th Annual White Collar Crime Institute, SEC Enforcement Co-Director Steven Peikin imparted a few suggested “do’s and don’ts” for effective communication with the SEC during the Wells process—typically the last opportunity to address potential charges prior to the authorization of a SEC enforcement … Continue Reading
Potential disputes involving unicorns have been a hot topic for the last several years. We predicted that would continue this year in in our webinar and related blog post: The Top Ten Regulatory and Litigation Risks for Private Funds in 2018. In April, the Regional Director of the SEC’s San Francisco office, Jina Choi, confirmed … Continue Reading
Last week, former CFTC Chairman Gary Gensler explained in remarks at M.I.T. that he believes the second and third most widely used virtual currencies—Ether and Ripple—may have been issued and traded in violation of securities regulations. This comes on the heels of a crackdown on cryptocurrency-related securities by the SEC, which is particularly focused on … Continue Reading
On April 12, 2018, the SEC’s Office of Compliance Inspections and Examinations issued a risk alert listing the most common compliance issues concerning fees and expenses charged by SEC-registered investment advisers. Advisers should review their practices, policies and procedures to ensure compliance with their advisory agreements and representations to clients in light of the fee … Continue Reading
With the public equity markets at an all-time high and private equity fund raising setting new records, it might seem counterintuitive to forecast litigation and regulatory risks. The opposite is true. Disputes typically follow capital, and the steeper the growth curve, the greater the risk of litigation and regulatory scrutiny. With that backdrop, we are … Continue Reading
In his recent remarks at the Securities Regulation Institute, SEC Chairman Jay Clayton had some stern words for market professionals, especially lawyers, involved in initial coin offerings (ICOs). He expressed concern that lawyers in the space “can do better” in their role as gatekeepers to the securities markets, particularly in advising clients whether the “coin” … Continue Reading
If a team from the SEC arrives at your office and says, “We are conducting an on-site examination and would like to talk to the CCO right now,” are you prepared? A handful of registered investment advisers have faced surprise SEC exams in recent months. These exams come in two flavors: either a “for cause” … Continue Reading
Last night, the SEC announced its enforcement results for the Fiscal Year 2017, accompanied by a report from the Co-Directors of its Division of Enforcement. While the total number of actions was down slightly from 2016, the percentage of those cases involving investment advisers or investment companies – 18% – remained consistent, and amounted to … Continue Reading
On October 4, 2017, U.S. Representative Sean P. Duffy [R-WI-7] introduced U.S. House of Representatives Bill H.R.3948 entitled the “Protection of Source Code Act.” If enacted, the Bill would amend the Securities Act, the Securities Exchange Act, the Investment Company Act and the Investment Advisers Act to prohibit the SEC staff from obtaining algorithmic trading … Continue Reading
The SEC’s pay-to-play rule has given advisers reason to worry about potential foot faults since its adoption. As we have noted in prior posts, the rule is filled with landmines and is therefore difficult to navigate. As was evident from the SEC’s announcement of a series of settlements of alleged pay-to-play violations in early 2017, even … Continue Reading
We recently posted about the risks associated with veil-piercing claims and the ways in which fund managers can protect themselves from exposure to these claims. Our first post on veil-piercing focused on Delaware standards, while this post discusses California law. California law differs in several important respects from Delaware law on this topic. If a … Continue Reading
The SEC staff recently published an alert highlighting the most common deficiencies seen in investment advisers’ marketing materials. Based on its recent examinations and initiatives, the Office of Compliance Inspections and Examinations (OCIE) issued its risk alert to highlight compliance issues relating to Rule 206(4)-1 (the “Advertising Rule”). Here are the top six: Misleading Performance … Continue Reading
A veil piercing claim can be a worst-case scenario for a private fund manager dealing with a struggling portfolio company investment – the company fails, and ensuing legal claims are brought not only against the portfolio company, but also against the fund and its GPs. How can fund managers manage that risk? Limited liability is … Continue Reading
SEC Announces New Approach to Disqualification Waivers
By Samuel J. Waldon, Karen J. Garnett, Joshua M. Newville and Robert E. Plaze on Posted in Regulation, SEC, Securities Law
SEC Fines Fund Manager $5 Million Over Undervaluation of Assets
By Joshua M. Newville and Brian Hooven on Posted in Compliance, Disputes, Hedge Funds, Regulation, SEC, Securities Law
DC Circuit Opinion Reaffirms Fiduciary and Disclosure Obligations of Advisers While Rejecting SEC Finding of “Willful” Violations
Fraud Claims Against Startup Founder Involving Secondary Market Sales Demonstrate SEC Focus on Privately-Held Companies
By Joshua M. Newville and Brian Hooven on Posted in Compliance, Disputes, Regulation, SEC, Securities Law, Venture Capital
The Top Ten Regulatory and Litigation Risks for Private Funds in 2019
By Timothy W. Mungovan, Samuel J. Waldon, Joshua M. Newville, Michael R. Hackett, Anthony Drenzek, William Dalsen, Brian Hooven, Alexandra V. Bargoot, Lucy Wolf and Hena M. Vora on Posted in Compliance, Disputes, Examinations, Hedge Funds, Mergers & Acquisitions, OCIE, Private Credit, Private Equity, Private Equity Litigation, Regulation, SEC, Securities Law, Uncategorized, Venture Capital
Valuation of Illiquid Securities as a Focus of Recent Enforcement Actions
WSJ Article on Geolocation Data Highlights Risks for Fund Managers
By Joshua M. Newville and Jeffrey Neuburger on Posted in Compliance, Hedge Funds, Regulation
Bharara Task Force on Insider Trading
By Joshua M. Newville and Samuel J. Waldon on Posted in Compliance, Hedge Funds, Regulation, SEC, Securities Law
SEC Extends Registration Requirements for Investment Companies and Broker Dealers to ICOs and other Digital Assets
By Joshua M. Newville, Samuel J. Waldon, Robert E. Plaze and Lucy Wolf on Posted in Examinations, Hedge Funds, Regulation, SEC, Securities Law
Mt. Gox Debacle Showcases Cryptocurrency Litigation Concerns
By Joshua M. Newville and Brian Hooven on Posted in Compliance, Hedge Funds, Private Equity, Private Equity Litigation
SEC Enforcement Co-Director Gives Guidance for Wells Process, Part 2
By Samuel J. Waldon, Joshua M. Newville and Brian Hooven on Posted in SEC, Securities Law, White Collar
SEC Enforcement Co-Director Gives Guidance for Wells Process
By Samuel J. Waldon, Joshua M. Newville and Brian Hooven on Posted in SEC, Securities Law
Unicorns: The Tale Continues
Regulatory Scrutiny of the ICO Market – What Fund Managers Should Know
SEC Staff Issues Risk Alert on the Six Most Frequent Fee and Expense Compliance Issues
The Top Ten Regulatory and Litigation Risks for Private Funds in 2018
By Timothy W. Mungovan, Joshua M. Newville, Michael R. Hackett, Anthony Drenzek, William Dalsen, Alexandra V. Bargoot, Brian Hooven and Lucy Wolf on Posted in Business Development Companies, Compliance, Disputes, Examinations, Hedge Funds, Mergers & Acquisitions, Private Credit, Private Equity, Private Equity Litigation, Regulation, SEC, Securities Law, Venture Capital
Chairman Clayton Asks Lawyers to Knock it Off with the Unregistered Coin Offerings
By Joshua M. Newville and Jeffrey Neuburger on Posted in Hedge Funds, Private Equity Litigation, Regulation, SEC, Securities Law
Five Things to Think About Before a Surprise SEC Exam
SEC Releases FY 2017 Enforcement Results: Maintaining Focus on Individual Accountability and Investment Advisers
U.S. House Bill Aims to Curtail SEC Staff’s Ability to Obtain Algorithmic Trading Source Code
Pay-to-Play – SEC Expands Scope of Rule to CABs
Veil-Piercing Under California Law – Heightened Risks for Fund Managers
SEC Flags the Top Six Advertising Rule Deficiencies for Investment Advisers
Veil Piercing/Alter Ego Determinations – How Fund Managers Can Protect Themselves
By Manuel F Cachán, Joshua M. Newville and Lee Popkin on Posted in Disputes, Private Equity, Private Equity Litigation, Venture Capital
