Hedge funds are facing a blistering pace of legal and regulatory change, as well as unprecedented scrutiny from regulators and investors. Our hedge fund practice is comprised of former regulators, enforcement lawyers, and in-house counsel who closely track, and guide clients through, this evolving regulatory, compliance, and enforcement landscape. We understand government regulatory and enforcement priorities because we served in senior positions in the SEC’s Enforcement and Trading and Markets Divisions and the DOJ’s Criminal Fraud Section. We understand hedge fund priorities because we worked in major Wall Street financial institutions and on the trading desk of a prominent hedge fund. We leverage those experiences, and our firm’s entrepreneurial and business-savvy culture, to problem solve for hedge funds in a variety of legal situations.
In 2019, we expect the SEC to continue to focus on fee and expense disclosure and the allocation of expenses and investment opportunities at private equity funds and hedge funds. We think the Commission will review funds’ use of affiliated service providers and products and similar conflicts of interest in examinations. We further anticipate that the SEC will continue its focus on cybersecurity with an emphasis on ensuring that private funds’ cybersecurity policies and procedures are both sufficient and being followed, and that such funds have conducted a cybersecurity “risk inventory.” Finally, it is our view that the Commission will continue to monitor digital assets (including regulatory compliance where such assets are “securities”), focusing on areas such as portfolio management and trading, safety of client assets, pricing of client assets, and compliance and internal controls.