SEC stirs up private funds (The Wall Street Journal)

Last week’s release of both a new SEC rule proposal and Risk Alert aimed at private funds have the industry wondering if a more heavy-handed SEC lies ahead. The release of the rule proposal followed by the Risk Alert is not by accident, states Amy Lynch, FrontLine’s Founder and President. The rule proposal would require private equity firms and hedge funds to expand the amount of information they are reporting via Form PF. On its heels came the Risk Alert, which Ms. Lynch describes as the SEC reinforcing the need for additional rule-making. She sees both releases by the SEC as going hand-in-hand, with the Risk Alert laying out concerns the SEC has discovered at private funds over several years, particularly with fee disclosures and inaccurate performance data. See The Wall Street Journal (subscription required), “SEC Finds Some Private-Fund Managers Mislead Investors on Performance