As the PE industry has come under increased SEC scrutiny in recent years, sponsors and their compliance programs are scrambling to keep pace with the ever-changing regulatory landscape. In addition to enacting appropriate compliance measures, many PE sponsor chief compliance officers (CCOs) are confronting the difficulties and nuances of navigating an SEC examination for the first time. In a recent interview with the Private Equity Law Report, Latham & Watkins partner Nabil Sabki
described how PE sponsors can prepare for SEC exams and avoid missteps along the way. This first article in a two-part series presents Sabki’s thoughts on differences in the SEC’s approach to examinations and enforcement actions under current SEC Chair Jay Clayton and his predecessor, Mary Jo White, as well as common mistakes by sponsors during the exam process. In the second article
in this series, Sabki will describe difficulties sponsors have retaining and monitoring electronic communications by their employees, along with ways dual-hatted CCOs can satisfy SEC queries about the efficacy of their performance. See our two-part series on understanding the SEC’s National Exam Program: “How OCIE Selects Advisers to Examine
” (Jul. 12, 2018); and “Recent Exam Trends and How Fund Managers Can Determine the Type of Exam OCIE Is Conducting
” (Jul. 19, 2018).