SEC’s Rozenblit and Law Firm Partners Explain the SEC’s Enforcement Priorities and Offer Tips on How Hedge Fund and Private Equity Managers Can Avoid Enforcement Actions (Part Three of Four)

This is the third article in a four-part series covering the Practising Law Institute’s (PLI) Hedge and Private Fund Enforcement & Regulatory Developments 2014 event, chaired by Barry Goldsmith, a partner at Gibson Dunn & Crutcher and co-head of its Securities Enforcement Practice.  The first article in this series discussed key points made by Julie M. Riewe, Co-Chief of the SEC’s Asset Management Unit, on enforcement trends, principal transactions, conflicts raised by side-by-side management, valuation, allocation of expenses and the potential deterrent value of smaller enforcement actions.  The second article addressed CFTC enforcement concerns and cases, New York Attorney General’s Office initiatives and defense strategies for avoiding and managing government investigations.  This third article in the series focuses on: (1) SEC priorities for inspections and examinations of private fund advisers; (2) new technology and quantitative examination tools; (3) best practices for preparing for inspections and examinations; (4) how to interact with regulators to maximize positive outcomes and minimize the chance of an enforcement referral; and (5) how to preserve attorney-client privilege while complying with requests for information.  The participants in the relevant PLI panel included Hannah Berkowitz, a shareholder at Murphy & McGonigle, P.C.; Marc Elovitz, a partner and chair of Schulte Roth & Zabel’s Investment Management Regulatory & Compliance Group; Igor Rozenblit, co-head of the Private Funds Unit at the SEC’s Office of Compliance Inspections and Examinations; and John H. Walsh, a 23-year veteran of the SEC and partner at Sutherland Asbill & Brennan LLP.  See “Three Steps in Responding to an SEC Examination Deficiency Letter and Other Practical Guidance for Hedge Fund Managers from SEC Veteran and Sutherland Partner John Walsh,” Hedge Fund Law Report, Vol. 7, No. 6 (Feb. 13, 2014).

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