SEC Enforcement Action Targets Advisers to Private Equity Funds

15 March 2013
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  • On March 11, the Securities and Exchange Commission ("SEC") announced the settlement of charges against two affiliated private fund managers for misleading investors about the valuation and performance of a fund of private equity funds.
  • This action follows and reinforces recent public statements by agency officials that the SEC is focused on valuation, and demonstrates the continuing need for private equity fund managers to consider valuation issues that arise in the context of fund marketing.
  • Private equity fund managers should take steps to prepare for the SEC's examination and enforcement focus on the accuracy of advertised performance, valuation assumptions or methodologies, and related disclosures when marketing a new fund to potential investors.