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

Q&A: TCA Fund Management's Bob Press on Small-Cap Private Equity

Aug 25 2016 | 8:55pm ET

The emergence of private credit as a replacement for traditional bank financing...

Lifestyle

Kiawah: Island Reversal

Aug 24 2016 | 9:59pm ET

Looking for real estate investments but the typical real estate fare isn’t cutting...

Guest Contributor

Old Hill Partners: Embrace Illiquidity

Aug 9 2016 | 2:39pm ET

The age-old financial concept that higher yields are the result of higher risk and...