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Nine Things to Notice: SEC Examiners’ Focus Areas

Nine Things to Notice: SEC Examiners’ Focus Areas WHAT HAPPENED? As capital markets shift and the risks to market participants change, so do the focus areas of routine SEC exams. Below are trending items from recent examinations: KEY FOCUS POINTS: Environmental, social, and governance [...]

Firm Misused MNPI, Ordered to Pay $1 Million

Firm Misused MNPI, Ordered to Pay $1 Million WHAT HAPPENED? On May 26, 2020, the United States Securities and Exchange Commission released documentation detailing an enforcement action against a Los Angeles private equity firm and registered investment adviser, Ares Management, for its misuse of material nonpublic information (MNPI). The [...]

SEC Accepts Public Comment on Private Securities Offering Exemptions

SEC Accepts Public Comment on Private Securities Offering Exemptions WHAT HAPPENED? Last month, the Securities and Exchange Commission released a request for public comment on how to improve the current exempt offering structure. Through this process, the Commission is seeking to broaden opportunities for investment while continuing to protect [...]

Private Equity Firm Charged with Failure to Disclose Accelerated Portfolio Monitoring Fees

Private Equity Firm Charged with Failure to Disclose Accelerated Portfolio Monitoring Fees WHAT HAPPENED? On December 21, 2017, the SEC charged a private equity fund adviser (“Respondent”) with failing to adequately disclose accelerated portfolio monitoring fees.  Between 2013 and 2015, Respondent accelerated the payment of future monitoring fees from [...]

SEC Charges Unregistered Fund Manager

SEC Charges Unregistered Fund Manager WHAT HAPPENED? On October 26, 2017, the SEC charged an unregistered investment adviser and its principals (“collectively, the “Respondents”) with engaging a private fund it managed (the “Fund”) in conflicted transactions without providing disclosure to the investors. The conflicted transactions that Respondents performed includes [...]

Reminder that the New Form ADV Rules Took Effect on October 1, 2017

Reminder that the New Form ADV Rules Took Effect on October 1, 2017 WHAT HAPPENED? On October 1, 2017, the amendments to Part 1A of Form ADV and the Investment Advisers Act of 1940 (the “Advisers Act”) took effect.  The amendments, which are described in a previous Flash Report, [...]

PE Firm Charged with Improper Allocation of Broken Deal Expenses

PE Firm Charged with Improper Allocation of Broken Deal Expenses WHAT HAPPENED? On September 21, 2017, the SEC charged a registered investment adviser with improperly allocating broken deal expenses between three private equity funds it manages (collectively, the “Private Equity Funds”) and separate co-investment vehicles (the “Co-Investors”).  From 2004 [...]

PE Firm Charged for Improperly Allocating Overhead and Portfolio Expenses to Funds

PE Firm Charged for Improperly Allocating Overhead and Portfolio Expenses to Funds WHAT HAPPENED? On September 11, 2017, the SEC charged a registered investment adviser (“the RIA”) and its principal (collectively, “Respondents”) with improperly allocating fees and expenses to two private equity funds (collectively, “the Funds”) managed by Respondents.  [...]

Upcoming Amendments to Form ADV

Upcoming Amendments to Form ADV WHAT HAPPENED? The new ADV reporting requirements go into effect October 1, 2017. Under the revised Form ADV, advisers will: require investment advisers to disclose additional information about their separately management account (“SMA”) business; require investment advisers to report specific information on general business operations, [...]

SEC Fines Private Equity Firm for Inaccurate Disclosures

DOL Releases FAQ on Conflicts of Interest During the Transition Period WHAT HAPPENED? On July 6, 2017, the SEC charged a registered real estate private equity firm (“Respondent”) with executing a transaction between two funds (“Fund I” and “Fund II”) it advised on different terms than what was disclosed to [...]