Hedge Funds Get High Scores In New SEC Audits

Feb 13 2014 | 11:04am ET

Hedge fund and private-equity firms are doing pretty well in the Securities and Exchange Commission's new "presence exams."

The SEC said last week that it is issuing deficiency letters to only about half of the firms its reviewed so far. Routine exams yield deficiency letters in about 80% of cases, Ashish Ward, the SEC's exam manager in Los Angeles, told Thomson Reuters.

The "presence exams" are being conducted at the roughly 1,500 new private investment advisers required to register under the Dodd-Frank financial reform law. Such exams take less time that routine exams, but focus extensively on areas such as valuation, conflicts of interest and custody arrangements.

The SEC has conducted 250 such exams on newly-registered firms, putting it on pace to meet its goal of auditing 25% of them within two years.


In Depth

GSAM’s Papagiannis on Liquid Alternatives

May 25 2016 | 5:07pm ET

The popularity of liquid alternatives strategies has blossomed in recent years,...

Lifestyle

From Modern Trader: Stephen Curry is a Black Swan

May 18 2016 | 7:43pm ET

What do the rise of the Internet, the sinking of the Titanic, 9/11, and Stephen...

Guest Contributor

LendingClub and the Question of Internal Hedge Funds

May 19 2016 | 8:42pm ET

Peer-to-peer lending platform LendingClub Corp. has been in the news since the firm...