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05/23/2025

5/23/25: Weekly Recap of Headlines We Found Interesting

 
Democratization of Alts
 
This is an insightful read on the developing jurisprudence around ERISA investing and plan sponsor liability from attorney James Watkins.
 
  • Cunningham v. Cornell already put annuities in 401K's in the danger zone.
  • Now,  Pizzaro v. Home Depot sets up the future of ERISA management (and plan sponsor liability).
One way or the other, this will have a heavy impact on the "Democratization of Alts" especially if you believe that those investments should be located in clients' tax-sheltered accounts. It looks like it will be heard by the Supreme Court in October. While this would have been unthinkable a year ago, it could be the lever for an overall review (and potential gutting?) of ERISA if the political will exists. Businesses of all stripes that provide 401Ks to employees should keep an eye on this.  (Especially their boards of directors)
 
 
A New Business Model for Horror Movies
 
I've died in a horror movie- my one IMDB credit is for "The Devil's Restaurant" where I was tied to a chair and fed to demons in the opening scene. As a horror movie fan, I'm fascinated with the business model around the Jason Voorhees and Freddy Kruegers of the space. Director, Eli Roth, may have a new model...
 
https://www.theringer.com/podcasts/the-town-with-matthew-belloni/2025/04/09/director-eli-roth-will-kill-you-on-screen-for-1-million
 
Breast Implants as a Tax Deduction
 
While not a new case, Hess v. Commissioner is an entertaining yarn on the gray areas of deductibility.  In this case, the deductibility of breast implants centered around their size and impracticality other than for "work."  (The plaintiff, a self-employed exotic dancer, had implants that expanded her bust size to the size 56FF.)
 
 
Private Equity Ownership of Accounting Firm Complications
 
Bringing on outside ownership (Private Equity) for services firms doesn't come without complication.  We know about the different market dynamics when owners are divorced from "partners."  This recent note on LinkedIn underscores the complication when silos have to be formed for compliance purposes.
 

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