On June 3, 2022, Pastore LLC won an important motion against Travelers Insurance and several of its affiliates. Pastore LLC is representing a company that provides cybersecurity education that brought an action against its insurance provider for its failure to defend it in a regulatory action, as specified by its insurance policy. Pastore worked to cite in the insurance’s company’s parent corporation and subsidiary and amend the complaint to add claims against the new parties. Pastore was able to show the court that the new parties had participated in the wrongs against its client and should not be allowed to hide behind corporate shell games to avoid liability.
This past month, Pastore LLC assisted a registered investment advisor (RIA) with the filing of its Form ADV. In connection therewith the firm assisted the RIA in its calculation of regulated assets under management (RAUM), which totaled over $1 billion. The Securities and Exchange Commission (SEC) uses RAUM as its measurement of assets for registration purposes. However, RAUM has sometimes been misunderstood as representing total assets under management (AUM) for a company, and based on the firm’s experience the SEC itself has sometimes confused RAUM with AUM. RAUM does not include every type of asset that an RIA may manage, and in particular may not include certain real estate investments or investments in portfolio companies controlled by the fund. When assessing the financial condition of an RIA and its funds, it is important to distinguish between the assets counted under RAUM and the assets counted under AUM. An RIA that appears to manage a small volume of assets based on its RAUM may in fact manage a much larger volume of assets based on total AUM.