SEC exams and enforcement in ramp up mode (Hedge Fund Alert)

The SEC is rapidly planning more expansive exams and enforcement than its predecessor regime. An acceleration of investigations and enforcement cases has already begun, with particular emphasis on certain areas where the SEC has identified concerns. This includes SPACs, ESG, cryptocurrencies and a focus on disclosures and conflicts of interest. On SPACs, Amy Lynch, FrontLine’s Founder and President, sees the SEC’s enforcement cases sending a strong message by requiring the sponsors to forfeit their shares. She further comments that if the sponsor of a SPAC caught up in an SEC investigation is a registered investment adviser, it must report its involvement with the SPAC on its annual Form ADV, thus allowing more scrutiny by the SEC. See Hedge Fund Alert (subscription required), “Regulatory Roundup: SPACs, ESG Claims, Transparency in SEC Crosshairs as Enforcement Ramps Up”