Securities Law Prof Blog

Editor: Eric C. Chaffee
Univ. of Toledo College of Law

Thursday, March 8, 2012

SEC Commissioner Suggests Exempting Some Private Fund Advisers

The newest SEC Commissioner, Daniel Gallagher, has been speaking out lately about deregulating or slowing down regulation under Dodd-Frank.  In an address before the Investment Adviser Association Investment Adviser Compliance Conference/2012, he suggested that the SEC consider exempting some private fund advisers from the registration provisions that came in as part of Dodd-Frank since their clients are sophisticated investors that can fend for themselves.

Mr. Gallagher also discussed the extent of “failure to supervise” liability for compliance and legal personnel, an issue that has received much attention lately because of the Commission's 1-1 split in In re Theodore Urban.  He expressed concern that "continuing uncertainty as to the contours of supervisory liability for legal and compliance personnel will have a chilling effect on the willingness of such personnel to provide the level of engagement that firms need and that the Commission wants."

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