SEC Settles Cases Alleging Compliance Failures at Private Equity Firms
On March 11, the SEC announced two matters of significant importance to the private equity industry and to private fund sponsors generally. Together, these cases demonstrate the SEC’s continued focus on the private equity industry, in particular the role of compliance in preventing and detecting possible violations of the securities laws. These cases also reflect the SEC’s interest in monitoring the fundraising activities, valuation practices, and disclosures to investors of private fund sponsors. Although these two matters involved private equity firms, the issues they raised are applicable to a broad range of private fund sponsors, including fund-of-fund and hedge fund managers.