On Jan. 27, 2022, the Division of Examinations (EXAMS) of the SEC published a risk alert (the 2022 Private Fund Adviser Risk Alert), which supplemented the compliance deficiencies observed in its earlier examination of registered investment advisers that manage private funds (the private fund advisers) that were set forth in its earlier June 23, 2020 risk alert (the 2020 Risk Alert).
The additional deficiencies set forth in the 2022 Private Fund Adviser Risk Alert are: (1) failure to act consistently with disclosures; (2) use of misleading disclosures regarding performance and marketing; (3) due diligence failures relating to investments or service providers; and (4) use of potentially misleading “hedge clauses.”
