SEC’s upcoming message to private equity: you’ve got our attention (The Wall Street Journal)

A new SEC is expected to carry a mandate with an expansive enforcement process that could have a heavy focus on private equity firms. SEC chair nominee Gary Gensler would likely return the regulator to pursuing “message sending” and “headline making” enforcement cases of large fines. Private equity would seem to be an industry with a recent track record of regulatory mishaps that the SEC could rationalize for a larger, ongoing enforcement effort. FrontLine’s Founder and President, Amy Lynch, comments that while overall enforcement by the SEC in recent years has been active, cases against private funds have curtailed, easing from the higher number that occurred in 2018 from a “cleaning out of the pipeline” initiated under the Obama era SEC. Despite less enforcement activity with PE firms since then, numerous compliance issues continue to be uncovered by the SEC through exams, including deficiencies involving conflicts of interest and disclosures on fees and expenses. See The Wall Street Journal (subscription required), “Private Equity May Face Return of Attention-Getting SEC Fines Under Gensler“