SEC Enforcement Updates – Post-PFAR Developments

Last week brought Securities and Exchange Commission (“SEC”) enforcement developments that, in our view, demonstrate the SEC’s interest in pursuing cases against investment advisers for conduct that would have been restricted under the Private Fund Adviser Rules (“PFAR”) and that the SEC stated in the PFAR adopting release was inconsistent with advisers’ fiduciary obligations. 

As expected – and as previewed in our Client Alert on the Fifth Circuit’s decision in June – the SEC clearly still intends to act on the same concerns it raised in PFAR and will use its examination and enforcement tools to scrutinize the same adviser practices that drove the rulemaking.

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