Private fund managers should take note of a recent speech by
Bruce Karpati, Chief of the SEC Enforcement Division's Asset
Management Unit (AMU), in which Karpati described the SEC's
enforcement priorities for 2013 and provided guidance for managers
of private equity funds and hedge funds.
In his December 18, 2012 speech before the Regulatory Compliance
Association, Karpati discussed the SEC's past enforcement
activity concerning alternative investments and made clear that the
AMU will continue to scrutinize hedge funds and private equity
funds. Karpati also reviewed the SEC's past three years of
enforcement activity against hedge fund managers, highlighting that
the SEC has brought more than 100 enforcement actions against fund
managers, many of which involved conflicts of interest, valuation,
and compliance issues. Although he recognized that the majority of
advisers to hedge and private equity funds take their fiduciary
obligations seriously, Karpati expressed a
