Although the Securities and Exchange Commission has said little publicly about its recent inquiry into potential Foreign Corrupt Practices Act (FCPA) violations involving the financial services industry and sovereign wealth funds, this sweep – which began earlier this month – has critical implications for U.S. private equity and hedge funds.  In a guest article, Michael J. Gilbert and Joshua W.B. Richards, Partner and Associate, respectively, at Dechert LLP, detail the background of the SEC’s investigation; outline the relevant provisions of the FCPA; provide examples of scenarios in which hedge funds may be exposed to FCPA risks; and offer guidance on how to mitigate those risks.