Articles By Topic
By Topic: SEC Enforcement
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From Vol. 3 No.6 (Feb. 11, 2010)
Paul Hastings Hosts Program on Securities Litigation and Enforcement in Light of New SEC Initiatives to Enhance Enforcement Efforts and Encourage Witness Cooperation
On February 2, 2010, law firm Paul, Hastings, Janofsky & Walker LLP hosted a Securities Litigation & Enforcement Roundtable focusing on key current enforcement and witness cooperation initiatives at the Securities and Exchange Commission (SEC). The SEC Enforcement Division, led by Director Robert Khuzami, recently introduced new investigative units designed to enhance and revamp its investigation efforts, as well as to encourage witness cooperation in investigations. See “SEC Names New Co-Chiefs of Enforcement Division Asset Management Unit and Other Specialized Unit Chiefs,” The Hedge Fund Law Report, Vol. 3, No. 3 (Jan. 20, 2010). The speakers also discussed the implications of these initiatives and current enforcement trends for financial institutions and alternative investment vehicles, such as hedge funds. One of the key points of the discussion was the SEC’s increased emphasis on insider trading enforcement, in particular in the hedge fund context. The SEC has increased the number of insider trading enforcement actions recently initiated, and the techniques used by the regulator to investigate suspected insider trading have become increasingly aggressive and sophisticated. For a comprehensive discussion of practice points that can help hedge fund managers avoid insider trading allegations, including links to relevant articles from The Hedge Fund Law Report, see “Regulatory Compliance Association Hosts Program on Increased Risk for Hedge Fund Directors and Officers in the New Era of Heightened Regulation and Enforcement,” The Hedge Fund Law Report, Vol. 2, No. 50 (Dec. 17, 2009). This article summarizes the most relevant topics discussed at the Paul Hastings Roundtable, focusing on the SEC’s new enforcement initiatives and cooperation measures (including cooperation agreements, deferred prosecution agreements and non-prosecution agreements), and emphasizing the potential impact of those measures on hedge funds and their managers.
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From Vol. 2 No.33 (Aug. 19, 2009)
For Hedge Funds and Their Managers, the SEC’s New Enforcement Initiatives May Increase the Likelihood, Speed and Vigor of Inspections and Examinations
On August 5, 2009, Robert Khuzami, Director of the Division of Enforcement (Enforcement Division) of the Securities and Exchange Commission (SEC) delivered remarks before the New York City Bar entitled “My First 100 Days as Director of Enforcement.” In those remarks, Khuzami announced changes and new initiatives for the Enforcement Division. After a “rigorous self-assessment” of the Enforcement Division’s recent performance, Khuzami said, the new initiatives will refocus the Enforcement Division on speed and efficiency, less supervision and increased incentives for cooperation on the part of subjects of enforcement actions. For hedge funds and their managers, the restructuring of the Enforcement Division can have various relevant consequences, including increased potential for investigations or examinations; increased speed with which examinations may proceed after they are announced (and hence less notice of examinations); and, in general, an Enforcement Division that is both more zealous and better educated with respect to many of the investment activities and operations of hedge funds. We describe the new Enforcement Division units and discuss the Enforcement Division’s new priorities, focusing on hedge fund consultants and placement agents; streamlining of management of the Enforcement Division; the proposed Office of Market Intelligence; the likely effects of increased specialization; the anticipated increased scrutiny; and the likely impact on hedge funds and hedge fund managers of units other than the new Asset Management Unit.
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