However, Chair White’s conciliatory “open dialogue” overture to Silicon Valley should be juxtaposed with the government’s enforcement focus, which became more pointed at the recent Securities Enforcement Forum West conference in San Francisco on May 12, 2016. Erin E. Schneider, Associate Regional Director (Enforcement) in the SEC’s San Francisco office, told attendees that her office is seeing more allegations of fraud involving not-yet-public Silicon Valley companies. Importantly, Schneider acknowledged that the SEC understands that valuing private companies is difficult and often subjective. As a result, it is more likely to look at fiduciaries, including venture capital firms, to ensure that the policies and procedures used to value companies are fair and consistently followed….
