Tag Archives: SEC

Head of SEC Announces Resignation

On Monday, Nov. 14, Mary Jo White, the head of the Securities and Exchange Commission (the “SEC”) announced that she will resign when President Obama leaves office; two years before the end of her term.  Over the past eight years, the SEC has played a major role in the Obama administration’s effort to regulate big banks.  However, White’s resignation opens the door to President-elect Trump’s promise to deregulate the industry, specifically by targeting the Dodd-Frank Act.… Read More

SEC Proposes New Rule Effecting Registered Investment Advisors

On June 28, 2016, the SEC proposed a new rule applicable to private equity funds that are Registered Investment Advisors. The proposed rule would require these private equity funds to adopt and implement written business continuity and transition plans. The full text of the rule proposal is available at https://www.sec.gov/rules/proposed/2016/ia-4439.pdf.

The purpose of the rule is to ensure that private equity funds are addressing operational and other risks that could result from a significant disruption in their operations or … Read More

Unregistered Broker-Dealers and Private Equity Firms

On June 1, 2016, the Securities and Exchange Commission (the “SEC”) announced a settlement with Blackstreet Capital Management, LLC (“BCM”), a Maryland-based private equity firm, and its principal, Murry Gunty, that could negatively impact the ability of private equity funds to charge transaction fees in the future.[1]  Private equity funds have long charged fees at the closing of portfolio company transactions for their work in facilitating those transactions.  These fees have become an important aspect of private equity fund … Read More

SEC Audits of PE Firms: 3 Must Dos

As we have noted in earlier posts, the SEC has had increased authority over the private equity industry since Dodd-Frank was passed in 2010. Several years ago, an SEC official remarked that SEC exams “identified what we believe are violations of law or material weaknesses in controls over 50% of the time” (see below for link to quote). Not surprisingly, the Office of Compliance Inspections and Examinations of the SEC identified the examination of private fund advisors, with a focus … Read More

PE Firm Enters Into $39M Settlement with SEC

Blackstone Group LP, the world’s largest private equity firm, recently entered into a $39M settlement with the SEC for failing to fully disclose its fee practices. The practices involved accelerating monitoring fees to portfolio companies prior to their sale or IPO, thereby reducing the sale/IPO price. While the monitoring fees were disclosed to investors before they invested, the acceleration practice was not disclosed until later. The SEC also found that Blackstone received a “substantially greater” discount in legal fees, while … Read More