Exculpatory Hedge Clauses in Investment Advisory Contracts: Developments since Heitman Capital

Authors

Francis J. Facciolo, St. John's University School of Law
Leland Solon

Document Type

Article

Publication Title

The Investment Lawyer

Publication Date

2-2014

Volume

21

Abstract

The Investment Company Act of 1940 (ICA) and the Investment Advisers Act of 1940 (IAA) prevent an investment adviser from contractually limiting liability to its advisees through three main routes: statutory anti-waiver prohibitions, the IAA’s anti-fraud provisions, and limitations on indemnification by registered investment companies of their investment advisers. This article focuses on one of these three areas, the IAA’s anti-fraud provisions, and specifically, the SEC’s expansive interpretations of those anti-fraud provisions to cover exculpatory “hedge clauses” – caveats or cautionary statements – by investment advisers purporting to limit their liability to their advisees.

Comments

Available at: https://ssrn.com/abstract=3403809