Recently announced SEC rules aimed at increasing transparency among PE and hedge funds are facing a legal challenge from trade groups. The petition was filed in early September in The Fifth Circuit, a venue that has previously handed down setbacks to the SEC.
Litigation & enforcement partner Jeremiah Williams told Law360 that "the choice of venue is not a coincidence." The plaintiffs "picked a circuit that is relatively skeptical of federal agencies in general and the SEC in particular, " he said.
Jeremiah also noted that if litigation proceeds, final results could end up mixed, and the SEC's new quarterly disclosure requirements could be upheld, while its attempts to restrict contractual relationships may be found legally vulnerable. "It's not all or nothing," he said.
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