News & Analysis as of

SEC Examinations of Newly Registered Private Fund Advisers Wind Down

In testimony before Congress, SEC Chair Mary Jo White noted that she anticipates SEC staff will conclude a two-year initiative to conduct focused, risk-based exams of newly registered private fund advisers in October 2014. ...more

Three Disclosure Areas of Focus for Private Equity Firms Given Increased SEC Oversight

The private equity space is an area of increased scrutiny for the SEC. The SEC’s Office of Compliance Inspections and Examinations (OCIE) earlier this year announced its intentions to examine a significant percentage of never...more

New ACE Portal/NYSE Platform Could Facilitate Private Equity Fund Raising

An enduring challenge of private equity is fund raising, whether in connection with fund formations, portfolio company financings or limited partner secondary sales. The recent modification of the SECs rules on general...more

Expect Focus - Catching The Next Wave, Regulatory and Litigation Developments - Volume II, Spring 2014

In This Issue: - IN THE SPOTLIGHT ..Private Equity: The Next Wave of SEC Enforcement Actions? - LIFE INSURANCE ..How to Fight a STOLI Scheme: Court Rulings Offer Clues ..STOA Schemes Face...more

SEC Provides Guidance to Private Equity on Seller Escrows

The SEC has issued guidance to registered private equity advisers regarding escrow arrangements resulting from the sale of a portfolio company. The guidance revolves around a circumstance involving the sale of a portfolio...more

What Private Equity Fund Managers Need to Know About SEC Examinations

Prior to the passage of the Dodd-Frank Act, a private equity manager was exempt from federal regulation under the Investment Advisers Act of 1940 (the “Advisers Act”) so long as it managed fewer than 15 private equity funds....more

SEC Charges Private Equity Firm with Pay-to-Play Violations

For the first time since passing Rule 206(4)-5, the Securities and Exchange Commission (SEC) has charged a Philadelphia-area private equity firm with violations of the pay-to-play rule. The case concerns contributions made...more

View From McDermott: What Private Equity and Hedge Funds (and Their Benefit Plan Investors) Should Know About ERISA

ERISA imposes numerous obligations on fiduciaries holding assets of employee benefit plans. In addition to discharging its duties prudently and for the exclusive purpose of providing benefits to benefit plan participants and...more

SEC's Findings and Observations on OCIE's Presence Exam Initiative

During his speech on May 6, 2014, Andrew J. Bowden, the Director of the Office of Compliance, Inspections, and Examinations (OCIE) of the Securities and Exchange Commission (SEC) provided an overview and initial observations...more

Private Equity And The SEC: A Brave New World Of Scrutiny And Compliance

In early April 2014, the Securities and Exchange Commission (SEC) announced the formation of a new unit within its Office of Compliance Inspections and Examinations (OCIE) that will be dedicated to the examination of private...more

Spreading Sunshine in Private Equity

On May 6, 2014, Andrew J. Bowden, Director of the SEC’s Office of Compliance Inspections and Examinations (“OCIE”), gave a speech entitled “Spreading Sunshine in Private Equity” to the Private Fund Compliance Forum (sponsored...more

SEC’s Inspection Chief Cites Fee and Expense Deficiencies in the Private Equity Sector

In a May 6 speech the SEC’s Andrew Bowden said more than half of the private equity managers inspected in the last two years had either violated the law or had material weaknesses in how they handled fees and expenses. Hidden...more

SEC’s OCIE Director Reports Violations Regarding Fees Common at PE Firms

In remarks to a group of compliance officers from investment advisers to private equity funds in New York City, Andrew J. Bowden, the director of the SEC’s Office of Compliance Inspections and Examinations, announced that the...more

SEC Notes Growing Concern About Private Equity Fee Disclosures

Recent comments by Andrew Bowden, Director of the Office of Compliance Inspections and Examinations for the Securities and Exchange Commission (SEC), highlight the growing tension between Dodd-Frank compliance and fund...more

Och-Ziff And Private Equity Corruption Risks

Sometimes predictions come true. Starting in 2011, the SEC sent shock waves through the private equity industry when it launched a general inquiry into private equity compliance with the FCPA....more

SEC Issues Risk Alert on Investment Advisers’ Due Diligence Processes for Selecting Alternative Investments

The Securities and Exchange Commission’s Office of Compliance Inspections and Examinations (OCIE) issued a risk alert on January 28 regarding the due diligence practices of investment advisers when they recommend or place...more

The Financial Industry – Life Is Getting Tough

Financial institutions, investment banks, private equity firms and hedge funds are having a rough time. Things are just not going well for them. While the economic outlook is turning positive, the enforcement atmosphere is...more

SEC Announces Examination Priorities for 2014

On January 9, the SEC announced its examination priorities for 2014, which cover a wide range of issues at financial institutions, including investment advisers and investment companies, broker-dealers, clearing agencies,...more

SEC Exam Priorities Include Newly Registered Hedge Fund And Private Equity Advisors

The SEC has announced its examination priorities for 2014, which cover a wide range of issues at financial institutions, including investment advisers and investment companies, broker-dealers, clearing agencies, exchanges and...more

Private Equity FCPA Risks: Growing Rapidly

Several years ago, the SEC sent shockwaves through the private equity and hedge fund industries. The SEC launched an industry investigation focused on the legal principle that foreign sovereign wealth funds were a part of...more

SEC Charges Manager Of Private Equity Fund With Violation Of The Custody Rule

The SEC has settled an administrative action with the managing member of a fund of private equity funds. In an examination the SEC staff learned that the manager was violating the custody rule (Rule 206(4)-2 under the...more

A WARNing to Private Equity Regarding Potential Liability for Employment Decisions by Portfolio Companies

A federal district court in Indiana recently ruled that a plaintiff's class action lawsuit could proceed against both a New York private equity firm and one of its portfolio companies for an alleged violation of the Worker...more

In the Crossfire Why Private Equity Firms, Investment Funds & Their Managers Should Beware of the Foreign Corrupt Practices Act

Lance Armstrong and the world of competitive cycling has come under great scrutiny in recent days with the domination of the U.S. Postal team now undermined by the systematic doping that appears to have helped spur the team...more

Operational Regulatory Risks Facing Private Equity Firms

If you work in the private equity world, you probably know that you are already exposed to a variety of regulatory risks and obligations that can have a significant impact on your firm’s operations and financial rate of...more

Financial Services Quarterly Report - Second Quarter 2013: The U.S. Federal Reserve Board Charts an Independent Course in the...

The Board of Governors of the Federal Reserve System (“Board”) in December 2012 issued a proposed rule under the Dodd-Frank Act (“DFA”) for the enhanced supervision of foreign banking organizations (“FBOs”) and any foreign...more

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