Vladiator is CORRECT and be careful....different states have different rules regarding 1) what is considered a RIA ( reg. inve advisor ) and whay is not...2) what is considered a hedge fund Some states REQUIRE a 7 and 55, while other states only require the 65 to act as an IA ( investment advisor)......the bottom line is this: GET A SECURITIES attorney, to go through the applicable rules and regs or you could be in a heap of trouble
I observed Aphexcoil attempting to start an off shore hedge fund. Here is a picture of him: http://www.citypages.com/retail/display.asp?w=509&x=13182&y=632&z=58905757
not true. a trader trading accredited investors funds ( who are partners with the trader) is not an investment advisor therefore is not regulated by the rules you reference. best, surf
Trust me on this....i've had to face the heat on this exact subject before from regulators....plus had to pay very expensive legal fees to get some sort of set up that was acceptable...everything you said is correct except for one caveat: How is the Trader who is trading an accredited investors funds getting compensated???? ..if he is getting a % if the profit.....he then becomes classified as an IA in most states.......now are you ready for even more ambiguity? some states have exemptions for registration as an IA while others don't ...some states and the sec say that if it's 100 or less investors and under 25 million, registration is not REQUIRED with the SEC, however State Registration may or may not be.....now my head is spinning again
wow, i am sorry to hear that happened to you. hopefully, your attorney moved to have the case heard in federal court, where you odds of success would be greater. my understanding is that IA's are compensated by definition on a flat fee. you are totally right, make sure you have a good attorney before you even start. best, surf
LOL!!!! do you know how much it is to move anything to fed court????/how about 100k retainer fee up front...but , it wasn't that bad anyway and didn't come to that...but the point you bring up about the flat fee/ % of profits is worth expanding.....one of the troubles we ran into even by setting them up as an IA was that typically a RIA get's 5% of the account value or less on a quarterly or annual basis....whereas most traders want 50% of the profits on a monthly basis...some states said they couldn't be IA's for that reason..but your right, you need a real good SEC type attorney and if anyone needs some info on the ones I used, PM me and I'll give you their names...they are out of D.C.