Despite being subject to less onerous filing and compliance burdens compared to registered investment advisers (RIAs), it is important for exempt reporting advisers (ERAs) to stay vigilant about fulfilling their fiduciary duties. That is especially necessary as ERAs remain subject to SEC scrutiny and run the risk of becoming subject to a formal examination. To ensure they are able to emerge unscathed from SEC examinations, ERAs are encouraged to exercise certain precautions when operating their compliance programs and to study the substantive focus areas the SEC has targeted in RIAs. The National Venture Capital Association recently hosted a program to improve awareness among ERAs that featured Tony Drenzek, special regulatory counsel at Proskauer Rose, and Vivek Pingili, director and private market specialist of ACA Compliance Group (ACA). This second article in a two-part series explores recent trends in the manner and scope of SEC examinations of ERAs and RIAs, as well as lessons illiquid fund managers can glean from recent enforcement actions by the SEC. The first article discussed the SEC regulatory framework applicable to ERAs, tips for an effective ERA compliance program and key considerations for illiquid manager ERAs contemplating transitioning to RIA status. For further insights from ACA on ERAs, see “Exempt Reporting Adviser Qualifications and Compliance Obligations” (Mar. 8, 2012).