Congress is poised to eliminate the exemption in the Investment Company Act of 1940 (the 1940 Act) for investment companies located in Puerto Rico, the Virgin Islands, and other U.S. possessions. The 1940 Act governs investment companies, such as mutual funds, with the aim of protecting investors in those investment companies. Since its enactment, the 1940 Act has exempted investment companies located in U.S. possessions, apparently due to the challenges the Securities and Exchange Commission would have faced in administering the 1940 Act in remote territories at the time. That may be about to change.
Much ink already has been spilt on the September 9, 2015 Department of Justice policy memorandum signed by Deputy Attorney General Sally Yates. The Yates Memo signaled a shift in the DOJ’s approach to prosecution of white-collar crime towards an increased focus on pursuing individual executives and employees for corporate wrongs.