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Changing Ownership Structures: Corporate Investigations

Changing Ownership Structures: Corporate Investigations. A.G. Burnett, Esq. Deputy Chief, Corporate Securities Nevada Gaming Control Board. General Nevada Process . Public vs. Private Companies: Licensure of individuals / controllers, etc.

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Changing Ownership Structures: Corporate Investigations

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  1. Changing Ownership Structures: Corporate Investigations A.G. Burnett, Esq. Deputy Chief, Corporate Securities Nevada Gaming Control Board

  2. General Nevada Process • Public vs. Private Companies: Licensure of individuals / controllers, etc. • Investigations Division / Corporate Securities Division: Who does what • Technology Issues in 2009 • Orders of Registration for the PTC • Compliance Plans

  3. Private Equity Model • Private Equity: Limited Partnerships that invest the money of others (institutions, retirement funds, high net-worth investors); GPs are the fund managers, LPs are the investors. Funds typically have a set lifespan of over 3 years. • Licensing of all GPs and knowledge of, possible applications filed by, LPs at GCB’s selection • Why go Private? • No More SEC requirements (for some companies) • No More struggle to meet quarterly, yearly market and shareholder demands • Higher debt structure but possible higher returns on investment for LPs

  4. Private Equity, Continued • In Nevada, PE firms have to be “Form 10” PTCs; therefore, some form of independent auditing will still be required for firms • This model is now being proposed in instances where there is no PE Fund • How to investigate? • Compliance Issues

  5. Bankruptcies: Another Change • Current financial landscape is bleak, companies with heavy debt loads are facing difficult decisions • Chapter 11 Reorganizations: What goes in does not always come out (looking the same) • Chapter 7 issues • Trustees, Receivors, etc.—Licensees?

  6. Regulating the Worldwide Gaming Operator • Macau – A Good Example • This jurisdiction sitting next to Mainland China stands to be largest gaming market in the world • Junket Operators • VIP rooms • Compliance Programs for the foreign gaming company

  7. Japan • Thinking of legalizing gaming • This could revolutionize the pachinko / pachislot market

  8. Singapore • Newly legalized and highly regulated jurisdiction • Sands is only entrant at this point

  9. COMPLIANCE ISSUES • GCB still heavily relies on compliance committees and those who advise them, especially in foreign jurisdictions (in tandem with foreign gaming reporting requirements). • Compliance Committees will still be required for PE firms that own gaming companies

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