Isobel Markham, an editor at sister publication Private Equity International, recently sat down for a podcast with Josh Newville and Tim Mungovan from Proskauer to discuss the top litigation risks private equity firms face today, as well as what to expect from the Securities and Exchange Commission.
One aspect the SEC is focusing on this year is the protection of individual retail investors, but firms should not “be lulled into a false sense of security that they’re not going to face difficult questions from the SEC,” Mungovan says.
The SEC still hasn’t eliminated the groups that focus on private funds and large wealth managers; the regulator will just be taking a specific approach when it comes to this area.
“What I think they’re trying to do is be more targeted and focus on risks rather than focusing on, for example, doing a top to bottom exam of a particular fund advisor,” Newville says.
“They may focus on one or two or three or four issues that are top of mind for them or that are top of mind based on risks that they see in the industry, and focus on just those issues and do more of a deep dive on those issues and move on in order to get greater coverage on the fund adviser space.”
If you’re a private fund that has not yet been examined, expect a knock on your door from the SEC in the next year or two, Newville says.
If you haven’t already, sign up for PEI’s inaugural CFO Think Tank, a one-day, closed-door event in Boston!
This email was prepared by Brian Bonilla.