IVCA Feature: New Member Profile of Simon Compliance

IVCA Feature: New Member Profile of Simon Compliance

June 22, 2016

One of the many advantages of being part of the IVCA is the opportunity to network and expand the knowledge base with the members of the association itself, especially as new firms and support companies come on board, with their diverse points of view regarding the Venture Capital and Private Equity industries. One of the more substantial new members, in regards to creating those perspectives, is Simon Compliance. The firm is a boutique securities compliance firm offering a wide range of consulting services.

The following is a Q&A profile with Simon Compliance, which explores the firm’s background and their expectations for interacting with the IVCA.

New Member: Simon Compliance

Representative: Lindsey Simon, Founder & CEO

IVCA: What is a brief history and background of the Simon Compliance?

Simon Compliance: Simon Compliance was founded to provide the services I was looking for when I was the general counsel and chief compliance officer of a hedge fund.  As a former attorney at Winston & Strawn, and the former enforcement attorney at U.S. Securities and Exchange Commission, I was surprised by how ill-prepared I was to tackle the everyday tasks on the compliance side of the business...and this was all pre-Dodd Frank!  I quickly realized that the law firms and large compliance firms were not able to assist me with answers to the day-to-day compliance questions. I knew that with my background, if I was struggling, then others in their roles as chief compliance officers were too.

IVCA: Why did the firm decide to join the Illinois Venture Capital Association?

Simon Compliance: I have attended several IVCA events and believe the association plays a unique and important part in both educating their members, and keeping them connected. 

IVCA: Your name is on the door. What did you recognize in the marketplace that motivated you to open this type of firm?

Simon Compliance: Besides what I mentioned above, the business actually started for me –  people I worked with while at the hedge fund started reaching out to me to help with their compliance programs, and eventually word about my practice spread. Once Dodd-Frank passed, I was approached by several Private Equity firms to assist them with registration.  If you told me ten years ago that I would have my own business today, I would never have believed you. In general, lawyers aren’t the types that are the most entrepreneurial or risky, but I love this work.

IVCA: The compliance issue seems to be a balancing act on the edge of a knife. In your opinion, how can PE firms and federal securities law live in harmony with each other?

Simon Compliance: At this time, there is not enough dialogue between the SEC and its registrants. I am disheartened to see rules and guidance issued in the form of deficiency letters and case law. This makes it very difficult for managers to know what is expected of them.  For example, the issue of whether firms need to register as broker dealers in order to accept transaction fees should not be one that is determined unilaterally in an SEC enforcement case, without an opportunity for notice and comment.

Groups like the IVCA and other industry organizations are instrumental in convincing lawmakers that a dialogue is necessary, as well as providing continuing education for the lawmakers about the issues that are unique to our industry.

IVCA: In your vast experience in this field, at what point in the past twenty years has there been the most contention between financial services firms and financial securities law, and why?

Simon Compliance: While there have been numerous events in the past twenty years where there has been more tension between financial services firms and the federal securities laws than there is today, I believe that we are currently at another crossroads – although one that is not nearly as monumental as say the Dodd-Frank Act. 

The SEC is trying to figure out what should be standard for Private Equity firms in many areas, such as expenses and broker dealer registration, to name just two. These decisions will affect how PE firms, and perhaps Venture Capital firms, move forward. I think the industry is still in a period of ‘settling in’ to the rules and regulations, and that the SEC is still figuring out how to apply the rules to private fund advisers.

IVCA: What does Simon Compliance hope to achieve in their interaction with the IVCA?

Simon Compliance: I hope to support the membership, in any way those members will find useful – whether that means sitting on a panel or simply attending events.

For more information regarding Simon Compliance, click on SimonCompliance.com