Securities Law

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Markets have recently been experiencing heightened volatility and credit availability has tightened, which has placed valuation practices under unusual pressure from regulators and investors. The events of the past several years, including rising interest rates, geopolitical turmoil and the impacts of artificial intelligence tools, among other issues, have amplified the inherent challenges of valuing illiquid assets and sparked greater regulatory scrutiny. This is particularly true when marks affect fees paid by investors, or the prices at which they invest in or redeem from a fund.

GP-led secondary transactions continued to soar in popularity in 2025.  With mixed economic indicators potentially impeding other kinds of private equity exit events, the uptick in continuation funds shows no signs of slowing down in 2026.  Their popularity should come as no surprise—under the right conditions, a secondary transaction creates a win-win scenario for all stakeholders, providing legacy investors with near-term liquidity and an option to roll over their investments, new investors with an opportunity to invest in portfolio assets with a proven track record but greater room for growth, and fund advisers with an extended period to capture future upside as well as the potential for new capital to support portfolio assets. 

On December 16, 2025, the Securities and Exchange Commission’s (“SEC“) Division of Examinations issued a Risk Alert highlighting several recurring deficiencies in investment advisers’ compliance with the provisions of Advisers Act Rule 206(4)-1 (the “Marketing Rule”) governing use of testimonials and endorsements as well as…

The last two decades have been marked by robust enforcement of the U.S. Foreign Corrupt Practices Act (“FCPA”) by the U.S. Department of Justice (“DOJ”) and Securities and Exchange Commission (“SEC”).  In line with its “shock and awe” approach, the Trump Administration seemingly called the future enforcement of that law into question when, on February 10, 2025, President Trump signed an Executive Order directing the Attorney General, Pam Bondi, to “pause” enforcement of the FCPA and conduct a comprehensive review and update of the law’s enforcement approach. The “pause heard around the world” shocked many commentators, anti-corruption campaigners, and countries that are signatories of the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions (“OECD Convention”), as it raised questions about the United States’ commitment to combatting corruption going forward.

Amid a challenging environment for exits, especially in the wake of the recent market volatility, private fund managers continue to pursue alternative strategies, such as term extensions and liquidity solutions, to ride out the liquidity downturn. While these measures are designed to protect the value of the funds’ investments and are frequently requested by limited partners, they raise potential regulatory concerns that have been the subject of SEC scrutiny in the past. As noted by a senior staff member of the Division of Examinations in March, the SEC continues to conduct exams with a focus on the bread-and-butter issues like fees, conflicts and related disclosures. Therefore, as funds approach maturity, it is worth reviewing the areas that have received the greatest regulatory attention.

Private credit has become an essential source of financing globally, with fund sponsors enjoying strong demand from borrowers, market participants, and investors.  However, as the industry’s “golden age” continues, regulatory scrutiny is growing.  Media coverage and legislative inquiries have pressured agencies — particularly the SEC — to take action.

With Paul Atkins as the new SEC Chair, the agency’s priorities have shifted away from many of the aggressive policies of former Chair Gensler. The first four months of the Republican controlled SEC saw a dramatic shift in the approach to crypto with the dismissal or pause of major litigation, the termination of several longstanding investigations, the recission of accounting guidance regarding the safeguarding of crypto assets and the establishment of a new task force to help formulate the regulatory approach to crypto going forward. With the enforcement program under a new SEC undergoing significant changes, there will likely be a return to more traditional enforcement cases with greater emphasis on egregious conduct involving pecuniary gain or investor harm, moving away from “pushing the envelope” cases. Enforcement sweeps involving off-channel communications, late filings and other “broken windows” initiatives are expected to fall by the wayside. Regulation by enforcement could be replaced by increased interaction with the Staff, formal or informal guidance or lighter-touch rulemaking.

Over the past year, regulatory scrutiny of the credit markets has intensified, with the SEC investigating the potential use of material nonpublic information (“MNPI”) relating to credit instruments. The SEC brought a number of enforcement actions against investment advisers involving the failure to maintain and enforce written MNPI policies involving trading in distressed debt and collateralized loan obligations, even in the absence of insider trading claims. We anticipate that these investigations of trading in private credit instruments and related MNPI policies will continue, as SEC enforcement staff has increased their focus on these markets. 

With ESG regulation now well embedded across all major jurisdictions, the trend we see for 2025 is about increasingly sophisticated triangulation by private fund managers between the regimes that apply by default (such as mandatory corporate sustainability reporting), those that apply by choice (such as becoming an Article 8 fund within the meaning of the EU’s SFDR or the new for 2024 ESMA ESG Fund Name Guidelines – see summary here) and those that apply by third party request or expectation (such as reporting obligations within side letters). As regimes evolve, the ESG-approach of any fund once identified, chosen and defined must also take into account tracking developments and monitoring compliance.

Confession: writing this in May 2025, we cannot predict with confidence what the rest of 2025 will bring. The year has already seen four months of change and upheaval – political, regulatory, and economic. The new US administration has touted a business-friendly regulatory environment, with actual and promised tax cuts and deregulation. However, geopolitical tensions, tariff trade wars and political instability have introduced new risks and created a climate of extreme unpredictability. We should expect 2025 to hold several surprises still, whether that is a breakout of peace or new political themes obtaining prominence in one or more jurisdictions.