ALM General Counsel Summit Reveals How Hedge Fund Managers Can Prepare for SEC Examinations

As the SEC continues its unprecedented enforcement streak – with 807 enforcement orders for a record $4.2 billion in monetary remedies in the last fiscal year – hedge fund managers need to prepare for the inevitable SEC examination.  See “SEC Chair Emphasizes Enforcement Focus on Strong Remedies and Individual Liability,” Hedge Fund Law Report, Vol. 8, No. 44 (Nov. 12, 2015).  Proper preparation for an examination is critical for hedge fund managers to minimize the risk of further enforcement action.  Speakers at Corporate Counsel’s Ninth Annual Hedge Fund General Counsel and Compliance Officer Summit addressed the best strategy for these preparations, including having a robust compliance program with proper policies and procedures in place, as well as conducting periodic mock examinations.  This article summarizes those panel discussions, highlighting recommended tools and techniques hedge fund managers may employ to properly prepare for SEC, as well as internal, investigations.  For more on preparing for SEC exams, see “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),” Hedge Fund Law Report, Vol. 8, No. 2 (Jan. 15, 2015).

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