Powers, Forman Analyze Recent "Gatekeeper" Actions against Fund Administrators by the SEC and Investors

Articles / September 9, 2016

Partner Marc Powers and Associate Jonathan Forman co-authored an article published in the September 8, 2016, issue of The Hedge Fund Law Report. The article, "'Gatekeeper' Actions by the SEC and Investors Challenge Private Fund Industry” discusses how fund administrators have been targeted in recent SEC enforcement actions and civil lawsuits by investors that seek to make administrators liable for the misconduct of fund managers and their principals. Powers and Forman noted that the private fund industry will likely be affected by "[t]hese aggressive enforcement actions and civil lawsuits" because they "are the first of their kind to argue that administrators serve in a gatekeeper role." After providing insights into how these new theories of liability have been framed by the SEC and investors, Powers and Forman provide takeaways for fund administrators, managers and investors on these new developments, including compliance measures administrators may take both before and after engaging with a fund.

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