The U.S. Securities and Exchange Commission (SEC) has summoned three Nevada entity wagering funds in what pundits believe to be another witch hunt for possible securities violation.
According to Legal Sports Report, SEC Atlanta Regional Office issued subpoenas to this still unidentified entity funds on Monday. Citing the documents that the news website obtained, the SEC has given these fund operators two weeks to produce and to send copies or the complete file related to their business operations.
The documents that the SEC wanted to get were advertisements, marketing materials, emails, text messages, and other written communications used to promote their fund or explain to investors how to send money to their fund; Documents pertaining to the identity of people who received promotional correspondences; All documents sent by funds to investors; All documents received by funds from investors; The names and addresses of investors, and the amounts contributed by those investors to funds; All documents relating to the income, net worth, risk tolerance and investment experience of investors; Documents pertaining to the IP address, web name, web host and content of funds’ websites; Any communications between a fund and the SEC, a state or federal legislator, or a state or federal regulator, that pertain to Nevada Senate Bill 443.
As for the reason why the SEC suddenly demanded information about their advertising and marketing practices, the identity of their investors, and their correspondences with business partners, regulators and other officials, only God can tell.
Why? Because the subpoena did not indicate the reason or purpose why the SEC needed those documents. Although the regulatory body does audit businesses and financial institutions from time to time, many have raised their eyebrows on why the SEC would subpoena the whole industry at once.
Speculations are rife that the SEC is probing a possible case of investors in entity funds being misled by the funds themselves. Some believe that the SEC is trying to find out whether these funds are mimicking the financial markets without subjecting itself to the usual financial regulations.
But whatever reasons that the SEC have, the SEC probe is surely causing some jitters to these entity funds since the identities of their investors are at stake.
Several funds expressed frustration that they are being compelled to release private information by an agency whose regulation they believe their fund to be exempt from.
