Operational regulatory risks facing private equity firms

Abstract

Purpose

The purpose of this paper is to explain various regulatory risks and problem areas facing private equity firms and to recommend compliance policies and procedures to minimize those risks.

Design/methodology/approach

The paper explains several problem areas that have been the subject of regulatory investigations, including fees and expenses, antitrust, the Foreign Corrupt Practices Act (FCPA), fundraising, and insider trading.

Findings

Regulators and prosecutors are increasingly focusing on private equity firms.

Practical implications

Many private equity advisers met their registration deadlines but have not dedicated meaningful attention to customizing and implementing compliance policies and procedures, often purchased from non-law firm compliance consultants. Now is the time to take the next step.

Originality/value

Practical guidance from experienced financial services lawyers.

Citation

Legault, J., Quiňones, P., G. Pedretti, M., Poe, A. and Zhou, L. (2013), "Operational regulatory risks facing private equity firms", Journal of Investment Compliance, Vol. 14 No. 3, pp. 11-15. https://doi.org/10.1108/JOIC-09-2013-0023