Enforcers Target Fund Valuation Practices

Fund valuation practices have been a recent focus of the SEC and, increasingly, federal prosecutors.

Two enforcement actions settled in recent weeks make clear that the SEC is actively pursuing a broad array of valuation-related cases, from the use of allegedly inadequate methodologies to audit failures. In addition, private credit fund valuations are under pressures as lenders and other market participants have begun to mark down collateral values even where the funds have yet to do so themselves. Based on recent statements by senior SEC and DOJ leadership, and in view of recent headlines citing private credit risk, we expect more cases will follow.

Continue reading on the Cleary Enforcement Watch blog.