Don’t tell me I didn’t tell you so! Just one week after I cautioned that the SEC is stepping up scrutiny of private equity funds, the agency announced two recent PE enforcement actions. In both cases, the PE firms involved paid hefty penalties.
In the first case, the firm was charged with improperly soliciting investments. The SEC specifically alleged that New York-based private equity firm Ranieri Partners violated securities rules requiring that an individual who solicits investments in return for transaction-based compensation be registered as a broker.
The employee in question was reportedly hired as a “finder” who would merely make initial introductions to potential investors. De facto he acted beyond this capacity by communicating with prospective investors and their advisors and providing them with key investment documentation that he received from Ranieri Partners.
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