Capstone's overall philosophy on compliance is to be extremely conservative. Though we believe a system of clear rules, consistent supervision and regular education are important elements of a good compliance plan, we do not believe these guidelines are a substitute for creating a strong culture of ethical behavior. The second level of protection for the firm and its clients relates to our focus on longer-term analysis of policy. We do not endeavor to discover information that will be relevant in the very short-term. Instead, we focus on using public documents and information to discern policy trends that will impact investments on a multi-quarter or even multi-year timeframe.

 

Capstone Compliance Highlights:

  • Annual mandatory compliance training (conducted by leading law firm K&L Gates) with a specific focus on issues related to political intelligence
  • A compliance script that is read before every interaction with government employees that asks them not to reveal any confidential information
  • Email and instant message monitoring
  • Bi-annual reviews of compliance procedures
  • Regular employee attestations regarding changes to compliance procedures
  • Prohibition on research related to Food and Drug Administration (FDA) drug approvals and Federal Trade Commission (FTC) merger approvals

Capstone does not operate an expert network business model. Our core product is the analysis of our investment professionals. We do hire experts from time to time, but these interactions are strictly controlled. Capstone employees are prohibited from compensating government officials (federal, state, local or foreign) in any way for meetings, conversations or other interactions. Capstone employees are prohibited from compensating any person who has been a government official (federal, state, local or foreign) within the last six months of when the payment is made. Capstone employees are prohibited from compensating any current employees of a publicly listed company or any person who has been an employee of a publicly listed company within the last 12 months of when the payment is made. Capstone employees must clear compensation for other sources (lawyers, outside experts, etc.) with the chief compliance officer.