Signaling its increased scrutiny of private fund managers (including hedge, private equity, and venture capital fund managers), the SEC yesterday supplemented its June 23, 2020 Private Fund Risk Alert to identify additional deficiencies identified in recent examinations of such advisers which included the following:
- Deficiencies in following disclosures in fund offering and other materials
- Deficiencies pertaining to performance presentations and marketing
- Deficiencies related to due diligence
- Deficiencies pertaining to misleading hedge clauses in documents that purported to waive or limit the Advisers Act fiduciary duty except for certain exceptions, such as a non-appealable judicial finding of gross negligence, willful misconduct, or fraud which are currently found in almost all fund offering documents.