Regulatory Compliance Association Reviews

SEC Focus on Investment Adviser Fiduciary Duty and Conflicts of Interest™

Practice Edge 02

Date: June 25, 2015
General Session: 12 Noon to 1:30 PM
Location: Webcast (Free)

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Through speeches, examinations and enforcement actions, the SEC and its staff have made clear that they consider asset managers/ conflicts of interest to be one of the agency’s primary focus areas. Fiduciary duty and conflict mitigation were founding principles of the Investment Advisers Act, and the organization of the Asset Management Enforcement Unit and the creation of specialized alternative fund teams within OCIE reflect a renewed focus on conflicts and the SEC’s zeal for pursuing related cases. In general, SEC staff are combing for examples of transactions, arrangements and situations that are consciously or unconsciously biased in favor of an investment adviser’s own financial interests. As a result, the SEC’s activities in this area have created new and more defined regulatory expectations that unfortunately are not stated expressly through rulemaking or interpretive guidance.

Students will master the following at the conclusion of this session:

  • Evaluate recent enforcement cases regarding conflicts and practical techniques for addressing/mitigating similar conflicts within their firm.
  • Review issues around allocation of expenses between fund, managers and investors, including expenses relating to private equity operating partners.
  • Recite examples of institutional conflicts that arise from the relationship between a private fund manager and its funds’ portfolio companies and service providers, including conflicts that arise from: (1) allocation of fund and portfolio company expenses; (2) relations with service providers and vendors; (3) expense shifting between funds; (4) portfolio company capital structure; and (5) transaction, monitoring, consultancy, and directors fees paid by portfolio companies to a manager or its personnel.
  • List primary conflicts involved in “side-by-side” management of performance fee- and non-performance fee-accounts or funds.

Session Chairman:

Walter Zebrowski, JD, CPA, Principal, Hedgemony Partners
Chairman, Regulatory Compliance Association

Senior Fellow from Practice:

Anthony Conte, Principal, Financial Services Advisory, PriceWaterhouseCoopers

Guest Lecturers:

Elizabeth Crotty, JD, Director, Asset Management Regulatory Practice, PriceWaterhouseCoopers
Anthony Kelly, JD, Assistant Director, Division of Enforcement, Asset Management Unit, SEC
Kent Knudson, CPA, Director, PriceWaterhouseCoopers
Mark Perlow, JD, Partner, K &L Gates

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