SEC Turns Attention To Private Equity

Jan 26 2012 | 9:51am ET

The Securities and Exchange Commission is likely to step up its oversight of—and actions against—private equity firms over the next few years, the co-head of its asset management enforcement unit said yesterday.

Robert Kaplan said the p.e. industry should expect more attention and enforcement actions in the years ahead. "I think that private equity law enforcement today is where hedge fund law enforcement was five or six years ago," he told the Private Equity Analyst Outlook conference in New York.

His colleagues on the asset management unit concurred, pointing to fees, expenses—especially broken-deal expenses—and valuation as areas of concern, as well as insider-trading.

"You can't take for granted that your accounting department or your auditor is going to properly account for an expense," Igor Rozenblit, a p.e. specialist in the unit, said. "If you have a separately-managed account and you're doing a deal together and there's a broken deal expense, make sure that's accounted for correctly."

Chad Earnst, assistant director of the unit, further warned that it would "focus on whether there's a systematic and consistent way the valuations are applied."

According to Rozenblit, questions have arisen "almost every time" the SEC has examined a p.e. firm.


In Depth

Q&A: Omni Macro Fund Bullish On India, Watching China

Mar 4 2015 | 3:35pm ET

Omni Macro Fund was formed in 2007 by Stephen Rosen, previously a prop trader at...

Lifestyle

Hedge Fund Manager Out as Minnesota Wild Minority Owner

Feb 25 2015 | 2:45pm ET

New York hedge fund manager Philip Falcone is no longer a minority owner of the...

Guest Contributor

Managing Diversification And Drawdowns In The “New Normal”

Mar 5 2015 | 2:42pm ET

In 2008-2009 diversification alone failed to provide adequate risk management for...

 

Editor's Note