DOJ, SEC Will Keep Ramping Up Enforcement Around Private Funds

When the SEC announced its 2022 examination priorities last March, regulation of private equity and hedge funds, or private funds, was listed at the very top. The SEC explained it intended to focus on those funds’ “compliance programs, fees and expenses, custody, fund audits, valuation, conflicts of interest, [and] disclosures of investment risks,” among other things.

***

The SEC is not the only regulator focused on private funds.

The US Attorney’s Office for the Southern District of New York, which has historically brought an outsized number of financial cases, expressly stated at a securities conference in March 2022 that it was focused on private equity and hedge funds.

Since then, prosecutors in the Southern District have brought criminal charges against individuals associated with Archegos Capital Management, Infinity Q Capital Management, and Allianz Global Investors US—all investment advisers that operated hedge funds marketed to institutional and high net worth investors.

Source: DOJ, SEC Will Keep Ramping Up Enforcement Around Private Funds