PIPEs Smoking Despite Investigations

Revelations of new enforcement actions involving private investments in public equity have not snuffed out the excitement they have generated, as the number of financings more than doubled from a year ago, according to PrivateRaise. The $20.3 billion raised as of June 15 for PIPEs is nearly as much as all of last year. “The PIPEs market has become more legitimate, more acceptable and more preferable,” CEO Byron Roth of California-based Roth Capital Partners told Investment Dealers Digest, which points to the increasing popularity of PIPEs among hedge funds. Adding to that legitimacy, according to IDD, is the ever-increasing vigilance of the Securities and Exchange Commission, which on Friday targeted another hedge fund, Dallas-based HBK Investments, for improper trading of private placement offerings. Fellow hedge funds don’t seem to mind to additional attention. Attorney Jocelyn Arel of the Boston law firm Goodwin Proctor said in an IDD interview, “My clients – which are big mutual funds and hedge funds – are well within the law and take their obligations seriously.”