The recent track record of firms with valuation related deficiencies would indicate that the new SEC valuation rule will trigger even greater enforcement in this area. Couple that with Gary Gensler’s aggressive regulatory style, expect valuation processes at funds to be closely reviewed during SEC exams. FrontLine’s Founder and President, Amy Lynch, provides the lead comments in discussing the Infinity Q case, and how it may be a precursor for what lies ahead, with the new valuation rule requiring more controls over valuation models and procedures. According to Ms. Lynch, the new rule expands the number of parties who may face liability in an investigation now that a fund’s board would be required to have more oversight than the current standards. See IGNITES (subscription required), “Valuation Rule Could Have Stopped Infinity Q’s CIO”
