Cone Marshall’s Principal, Geoffrey Cone Responds to the Feature; New Zealand – a Model of Tax Transparency

Cone Marshall is an international tax and trust law firm located in Auckland, New Zealand. The company was established in 1999, and its current principals are Karen Marshall and Geoffrey Cone. Cone Marshall works in collaboration with international families and their advisors to assist them create trusts, companies, partnerships, and provide global wealth as well as tax planning advice.

In the year 2012, an article was posted on several social networks including Facebook, Google+, Twitter as well as LinkedIn entitled: New Zealand – A model of Tax Transparency. Mr. Cone disagrees with the notion, and he pointed out that New Zealand is not a tax haven with the secretive private banking industry. He added that New Zealand is a charter member that subscribes to the principles attached to the gold standards of transparency.

There was a notable increase in the number of foreign trusts in New Zealand, and Mr. Cone gave a reason behind the increase. He said that New Zealand is internationally recognized as a stable, safe, a nation with the strong judiciary and substantial legal and professional infrastructure. He says that such a perception has led to the positive global reputation.

The OECD retains a list of tax havens and New Zealand has never featured and is not likely to feature on the list anytime soon. New Zealand along with few other nations featured on the OECD’s white list for significantly implementing the 2002 OECD model agreement. Also, the way New Zealand handles foreign trusts demonstrates leadership in tax transparency which in turn helps other governments to get relevant information upon request.

New rules were introduced in 2006 by Michael Cullen on submission of foreign trust disclosure form (IR607) and keeping records for tax purposes. New Zealand adhered to the new rules accordingly. New Zealand has 39 double tax agreements to ensure smooth cross-border trade and prevent tax evasions. Also, it has over 20 tax information exchange agreements with other nations. New Zealand can not be termed as a tax haven and all its the regulation bodies are working towards perfection.

The positive reputation of New Zealand in handling tax matters can be credited to the government as well as to service providers such as lawyers and accountants who act as foreign trustees. Cone Marshall along with his partner Geoffrey Cone, obey the highest principles of tax and trust transparency to ensure their clients get the most reliable advice on global tax and trust law.

China’s Debt-fueled Economy Similar to U.S. in 2007-08 Warns George Soros

George Soros is an American investor, author, and philanthropist who has a Jewish-Hungarian ancestry and holds dual citizenship of Hungary and United States. He is the current Chairman and founder of Soros Fund Management and Open Society Foundation. Soros broke the Bank of England on with short sales of US$10 billion worth of British Pounds that enabled him to make an enormous profit of $1 billion in 1992 UK currency crisis.

Soros is also known for his involvement in politics as a known supporter of American liberal and American progressive political causes. Soros has donated more than $11 billion from 1979 to 2015. He has contributed to political organizations on supporting Hilary Clinton in her bid to become US president. Soros is also known for making controversial statements that spike reactions from various parties including the government, media and organizations.

One of the recent opinions was about the state of the China’s economy which he claim is headed for a collapse following resemblance to the U.S. debt-fueled economy in 2007-08 which later led to the global financial crisis. George Soros believes that the current hike in credit growth figures should be taken as a warning of what is about to happen to China’s economy in the future with similar impacts to the world. Currently, Bloomberg survey shows the credit growth is unsustainable with figures surpassing the forecasted 1.4 trillion yuan and hitting 2.34 trillion yuan in the month of March.

Soros has already made a fortune of $24 billion through savvy wagers in the market showing how much investors cannot ignore his knowledge. During a world Economic Forum in Davos in January on, he made his sentiments clear when he disclosed to have placed a bet on some of the Asian currency as a way of expressing confidence that some countries in the region’s economy would have to experience a hard landing. However, China responded to his through the state media agency Xinhua that he has made similar predictions in the past, and this one is no different.

George Soros continued to insist that the reason the problem has affected China in a big way is because interbank lending is still small. However, he said that as the credit market surges, interbank lending will increase and eventually because a source of uncertainty and instability. The China’s economy is already experiencing soaring housing values with new home prices rising approximately 62 percent per year.

Soros also expressed positive indication about China’s foreign exchange saying that the strategy to link the yuan to a basket of various currencies was better than just linking it to the dollar to minimize the risk of devaluation. He also expressed confidence in the strengthened relationship between China and U.S. saying that it is good for calming the markets.
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Busy Year ahead for CCOs like Helane Morrison as they expect More Regulations in 2016

CCO groups note that members are gearing up for more scrutiny in 2016. This comes despite of the SEC officials saying that they have not changed their perception on chief compliance officers working in money management firms. According to compliance experts, institutional investors should pay more attention to their own due diligence.

The role of a compliance officer is to identify risks and lead an organization’s response. The regulators do not plan to change the roles of compliance officers. However, according to Deborah Prutzman, the CEO of the Regulatory Fundamentals Group LLC, the regulators are becoming more willing to enforce failures in order to have their expectations met. There have been high-status cases in 2015 that underscores this fact.

In June 2015, SFX Financial Advisory Management Enterprise Inc as well as its compliance officer were charged by SEC. According to the regulator, there was failure to implement the set policies to hinder misappropriation of client assets, filing a misstatement in a Form ADV filing, and failing to carry out annual reviews. CCO Mason paid $25,000 while SFX paid $150,000 to settle the charge.

Andrew Ceresney, SEC Enforcement Director noted that there was no doubt about the professional judgment of a chief compliance officer. Instead, actions have only been taken on cases that involve failure to create and implement such policies. He said this to the National Society of Compliance Professionals in November while addressing compliance officers’ concerns. In addition, Ceresney said that they consider the facts as well as fairness in each case, although many cases involved CCOs that had engaged in clear misconduct.

According to him, SEC charges CCOs when they directly engage in a conduct that hurts investors. He also added that the enforcement actions should act as a support to CCO’s role within a firm.

Ms. Barr, president of the Investment Advisors Association, is of a contrary opinion. According to her, the anxiety levels are going up in terms of attracting the brightest to be compliance officers. As much as her fear is valid, in my view, the chief compliance officer field still attracts the best.

Helane L. Morrison is a former head of the San Francisco SEC office where she worked from 1997 to 2007. She carried out various duties that include securities enforcement, regulatory matters, and litigation in her capacity, as the district administrator, and later, as regional director.

Currently, Morrison is a managing director, chief compliance officer and general counsel of Hall Capital Partners. She is also a core member of the company’s executive committee. Morrison has extensively practiced law for over ten years. She got a J.D. from the University of California at Berkeley School of Law.

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Kyle Bass Makes His Predictions about China’s Economic Crisis

Highland Capital Management is based in Dallas, Texas. It is run by Kyle Bass who also has a WordPress blog that is fairly popular. This techno guru has a record of being able to pick up on economic cycles. With the recent development in China, he states that an impending financing crisis is on the horizons. At the Ira Sohn Investing Conference in San Francisco, Bass took the time to speak about the crisis that he foresaw in China. He states that it will be even bigger and have more impact than the one that hit this area in 2007-2008. However, he does state that the global impact will not be as severe.

Though many people listened, some are saying that when he predicted the 2008 subprime crisis it was just pure luck. Though he rode the wings of being a superstar for a while, time was not kind to him. He has made several bad calls, but he still doesn’t turn down an opportunity it speak to the press or to go on television and share his points of view.

When he spoke at this investor’s conference, many still listened. He talked about China’s trillions of dollars in reserves could be burnt through in a short period of time. Some people think just because they have $3.5 trillion in storage that they can weather any storm that comes their way. Bass warns people that this is a farce. Only eight years ago they used to have quite a larger base. Their economic standing currently is about $10 trillion.

One of the reasons for the problems is the fact that the system is undercapitalized. China is still an emerging market. The last crisis on non-performing loans was in 2001-2002. They lost more than 30 percent of their across the board. However, they have since grown to over 400 percent in a mere eight years they are still going to have some losses. Their emerging market is higher than their developed market. When China lands it’s going to hurt, but it probably won’t lead to a recession. This could affect global growth by up to 50 percent or more. However, this is not likely to cause a recession in the US.

When and if a third of the global economy has a halt it doesn’t always mean a recession is inevitable. But there will be no chance of growth in the US either. It’s not the end of the world, as the US has already recapped the banks so that there are no problems, but we can expect to have problems with growth that is anticipated. To get through this crisis, China will print bonds to get through the time of crisis. Bass is talking, but with his track record, not may are really listening.