Proskauer on Private Fund Litigation

Tag Archives: Cybersecurity

The Trend Continues: Increased Regulatory Focus on Privacy & Cybersecurity for Private Funds

Recent enforcement actions highlight the increased regulatory scrutiny that private funds may face with respect to internal cybersecurity protocols and responses to cyber-crimes and cyber incidents under new and updated cybersecurity laws. … Continue Reading

In Continuation of Longstanding Focus on Cybersecurity, SEC Proposes Significant Amendments to Regulation S-P

By Mark S. Audet, Ryan P. Blaney, Nolan Goldberg, Robert E. Plaze, Robert Pommer and Robert Sutton on April 5, 2023 Posted in Compliance, Cybersecurity, Enforcement, News, Regulation, SEC, Securities Law

On March 15, 2023 the U.S. Securities and Exchange Commission (“SEC”) released its proposal to amend Regulation S-P: Privacy of Consumer Financial Information and Safeguarding Customer Information, while simultaneously issuing two additional cybersecurity-related rule proposals[1] and re-opening the comment period for its previously-proposed cybersecurity risk management rule released in February 2022.[2] This set of sweeping reforms … Continue Reading

Portfolio Companies in Distress: Navigating the Risks from SVB and Other Threats to Liquidity and Solvency

Everything, everywhere, all at once is our risk thesis for 2023, but one must not forget about concentration risk. This issue has rocketed up diligence agendas for LPs and GPs alike as the collapse of Silicon Valley Bank proved it really was the bank for venture capital.The entry of SVB into receivership on March 10, 2023 highlighted just … Continue Reading

Top Ten Regulatory and Litigation Risks for Private Funds in 2023

Everything, everywhere, all at once, as a descriptor, captures the litigation and regulatory risks for the asset management industry in 2023. Every corner of the market faces greater risks than at any time since 2008. After years of breakneck growth fueled by low interest rates and a largely laissez faire regulatory regime, significant change is … Continue Reading

SEC to Hire More Staff in Crypto Assets and Cyber Unit and Ratchet Up Scrutiny of Industry

By Jeffrey Neuburger on May 4, 2022 Posted in Asset Management, Cryptocurrency, Cybersecurity, Regulation, SEC, Securities Law

The SEC is expanding its team policing the crypto space by adding enforcement staff to its Crypto Assets and Cyber Unit. We previously noted that regulatory focus on new technologies in the decentralized finance space and further developments on the application of securities laws to digital assets were two of our top ten regulatory developments … Continue Reading

Increased Regulatory Focus on Privacy and Cybersecurity for Private Funds in 2022

By Steven Baker, Margaret A. Dale, Michael R. Hackett, William Komaroff, Kirsten E. Lapham, Timothy W. Mungovan, Dorothy Murray, Joshua M. Newville, Todd J. Ohlms, Seetha Ramachandran, Jonathan M. Weiss, Julia Alonzo, James Anderson, Julia M. Ansanelli, William D. Dalsen, Adam L. Deming, Kelly McMullon, Reut N. Samuels and Hena M. Vora on March 16, 2022 Posted in Asset Management, Compliance, Cybersecurity, Disputes, Enforcement, Private Equity, Regulation

2021 continued the trend of increased regulatory focus on privacy and cybersecurity for private investment funds in the U.S. and abroad. There are no signs of the trend leveling off any time soon. One of the topics that captured our attention last year was the rise of ransomware. As previously shared, ransomware has evolved from … Continue Reading

Top Ten Regulatory and Litigation Risks for Private Funds in 2022

Last year, we wrote, “The regulatory and litigation risks for private funds are greater than at any time since the financial crisis in 2008.” That statement is even more true today. The Wall Street Journal recently published separate front-page stories on an SEC initiative to oversee large private companies and the explosive growth of the private … Continue Reading

Bloomberg Law: Regulatory Oversight of Privacy, Cybersecurity & Private Investment Funds

By Margaret A. Dale, Todd J. Ohlms, Jonathan M. Weiss, Kelly McMullon and Hena M. Vora on August 30, 2021 Posted in Asset Management, Compliance, Cybersecurity, Enforcement, Regulation, SEC

Privacy and cybersecurity issues continue to garner significant attention in the U.S. and abroad. As private investment funds registered with the SEC and their portfolio companies see increased regulatory scrutiny relating to privacy and cybersecurity in the U.S., Proskauer’s Margaret Dale, Todd Ohlms, Jonathan Weiss, Kelly McMullon and Hena Vora write for Bloomberg Law as … Continue Reading

New Focus and Compliance Approach Needed for Privacy and Cybersecurity

By Margaret A. Dale, Michael R. Hackett, Kirsten E. Lapham, William Komaroff, Timothy W. Mungovan, Dorothy Murray, Joshua M. Newville, Todd J. Ohlms, Seetha Ramachandran, Ana Vermal, Samuel J. Waldon, Jonathan M. Weiss, Anthony M. Drenzek, Kelly McMullon, James Anderson, Alexandra V. Bargoot, William D. Dalsen, Adam L. Deming, David W. Heck, Hena M. Vora and Lucy C. Wolf on April 8, 2021 Posted in Asset Management, Compliance, Cybersecurity, Enforcement, Examinations, Private Equity, Regulation

In 2020, we saw an increased regulatory focus on cybersecurity. Though former SEC Chairman Clayton largely took the view that existing statutes and regulations were sufficient, the Division of Examinations increased exam activities in the space while agencies like FinCEN increased enforcement against violators. We can expect to see a continued focus on cybersecurity going … Continue Reading

Top Ten Regulatory and Litigation Risks for Private Funds in 2021

By Margaret A. Dale, Michael R. Hackett, Kirsten E. Lapham, William Komaroff, Timothy W. Mungovan, Dorothy Murray, Joshua M. Newville, Todd J. Ohlms, Seetha Ramachandran, Ana Vermal, Samuel J. Waldon, Jonathan M. Weiss, Anthony M. Drenzek, James Anderson, Alexandra V. Bargoot, William D. Dalsen, Adam L. Deming, David W. Heck, Hena M. Vora and Lucy C. Wolf on March 18, 2021 Posted in Asset Management, Compliance, Cryptocurrency, Cybersecurity, Disputes, Enforcement, Examinations, Hedge Funds, Mergers & Acquisitions, OCIE, Private Credit, Private Equity, Private Equity Litigation, Regulation, SEC, Securities Law, White Collar

The regulatory and litigation risks for private funds are greater than at any time since the financial crisis in 2008. Just a few examples prove the point: the pandemic (which caused extraordinary volatility in revenues and valuations for most asset categories); a new administration in Washington D.C. (with a more muscular regulatory agenda); continued proliferation … Continue Reading

2020 Proskauer Annual Review and Outlook for Hedge Funds, Private Equity Funds and Other Funds

By Asset Management Team on February 18, 2021 Posted in Asset Management, Compliance, Cybersecurity, Disputes, Enforcement, Hedge Funds, Private Equity, Regulation, SEC, Venture Capital, White Collar

Proskauer’s Private Investment Funds Group released its 2020 Annual Review. The yearly report provides a summary of some of the significant changes and developments that occurred in the past year in the private equity and hedge fund spaces, as well as certain recommended practices that investment advisers should consider when preparing for 2021. Read the … Continue Reading

A Timely Reason to Review Procedures for Risk Assessments and Vendor Contracts in Light of the SolarWinds Attack

By Nolan Goldberg, Ryan P. Blaney, Margaret A. Dale and Jeffrey Neuburger on December 28, 2020 Posted in Cybersecurity

As reported last week, a state-sponsored hacker may have breached multiple U.S. government networks through a widely-used software product offered by SolarWinds. The compromised product helps organizations manage their networks, servers and networked devices. The product is not only used by government agencies, but is widely used in both the public and private sectors. Whether or … Continue Reading

Regulatory Crackdown on Ransomware

By Seetha Ramachandran, Nolan Goldberg and Hena M. Vora on December 14, 2020 Posted in Compliance, Cybersecurity, Enforcement, Regulation

Ransomware is a Serious and Growing Problem In recent years, Ransomware has evolved from merely encrypting files/disabling networks in solicitation of ransom, to sophisticated attacks that often involve actual data access, theft and sometimes, the threat of publication. These sophisticated malware attacks frequently destroy backups and provide criminals even more leverage over their victims, coercing … Continue Reading

SEC Announces 2020 National Compliance Outreach Seminar for Investment Companies and Investment Advisers

By Anthony M. Drenzek, Robert E. Plaze, Samuel J. Waldon and Joshua M. Newville on October 29, 2020 Posted in Compliance, Hedge Funds, OCIE, Private Equity, Private Equity Litigation, Regulation, SEC, Securities Law, Venture Capital

On October 7th, 2020, the Securities and Exchange Commission (SEC) announced the rescheduled date of its 2020 national compliance outreach seminar for investment companies and investment advisers. This program is intended to help Chief Compliance Officers and other senior personnel at investment companies and investment advisory firms enhance their compliance programs. The SEC’s Office of … Continue Reading

Private Equity and Cybersecurity: A Guide to Preparing for and Responding to a Breach

By Alexandra V. Bargoot, Margaret A. Dale and Samuel J. Waldon on September 15, 2020 Posted in Asset Management, Compliance, Cybersecurity, Disputes, OCIE, Private Equity, SEC

A cyber breach can have serious legal, financial, and reputational consequences for a fund sponsor, as described in our previous post. As such, cybersecurity threats must be treated as business risks, not just a potential IT problem. Senior management at fund sponsors should take the lead to ensure that the sponsor is taking appropriate actions … Continue Reading

UK’s Financial Conduct Authority Warns That Fund Managers Are at Increased Risk of Cyber Attacks

By Kirsten E. Lapham on August 27, 2020 Posted in Asset Management, Compliance, Cybersecurity, News, Private Equity, Regulation

With 46% of UK business reporting a cyber attack during 2019/2020 and 32% reporting at least one a week – see the UK Government’s Cyber Security Breaches Survey 2020 – the UK’s Financial Conduct Authority (“FCA”) has issued a timely warning to market participants of increasing cyber security threats in the wake of COVID-19.… Continue Reading

Privacy in the Time of Pandemic: COVID-19 Provides Opportunity to Revisit Regulation S-P Privacy Policies

By Lucy C. Wolf, Margaret A. Dale, William D. Dalsen, Joshua M. Newville and Samuel J. Waldon on June 30, 2020 Posted in Compliance, Cybersecurity, OCIE, Regulation, SEC, Securities Law

With more people working remotely than ever before in light of COVID-19, firms in the private equity and hedge fund space should review their Regulation S-P privacy and information-safeguarding policies to ensure they are compliant and ready for a prolonged period of remote work. In particular, in view of SEC guidance, firms should focus on … Continue Reading

Private Equity and Cybersecurity: Threats, Consequences, and the Regulatory Framework

By Alexandra V. Bargoot, Anthony M. Drenzek, Samuel J. Waldon and Margaret A. Dale on May 20, 2020 Posted in Asset Management, Compliance, Cybersecurity, Disputes, Examinations, FINRA, OCIE, Private Equity, Regulation, SEC

Cybersecurity breaches and threats are pervasive concerns for any entity storing valuable data or managing large sums of money: private investment funds are no exception. Recently three private equity firms suffered breaches that compromised their email accounts and wire transfers, resulting in $1.3 million in losses. We have seen the SEC follow through on its … Continue Reading

Cybersecurity and Fraud Risks for Fund Managers in the Wake of Coronavirus

By Alexandra V. Bargoot, Margaret A. Dale and Seetha Ramachandran on March 23, 2020 Posted in News, Private Equity

COVID-19 has created many new concerns for private fund managers; however, managers should be particularly mindful of heightened cybersecurity and fraud risks. With increased numbers of employees teleworking, there are increased vulnerabilities for cybercriminal intrusions creating privacy-related risks for fund portfolio information, LP confidential data, and other sensitive electronically-stored materials.… Continue Reading

Top Ten Regulatory and Litigation Risks for Private Funds in 2020

By Margaret A. Dale, Michael R. Hackett, Kirsten E. Lapham, Timothy W. Mungovan, Joshua M. Newville, Seetha Ramachandran, Samuel J. Waldon, Jonathan M. Weiss, Anthony M. Drenzek, James Anderson, Alexandra V. Bargoot, William D. Dalsen, Adam L. Deming, David W. Heck, Brian A. Hooven, Christina H. Kroll, Hena M. Vora and Lucy C. Wolf on February 18, 2020 Posted in Business Development Companies, Compliance, Cryptocurrency, Disputes, Examinations, Hedge Funds, Mergers & Acquisitions, OCIE, Private Credit, Private Equity, Private Equity Litigation, Regulation, SEC, Securities Law, Venture Capital, White Collar

The private fund industry is more in the public eye than ever before. Private capital and private markets have experienced massive growth over the last two decades, substantially outpacing the growth of public equity. We have witnessed that trend continue during the past year, and have worked with our clients to navigate the greater uncertainty … Continue Reading

OCIE Publishes Cybersecurity and Resiliency Observations

By Robert Leonard, Michael Mavrides, Christopher Wells and Evan Zepfel on February 6, 2020 Posted in Compliance, OCIE, Private Equity Litigation, SEC

On January 27, 2020, the U.S. Securities and Exchange Commission’s Office of Compliance Inspections and Examinations (“OCIE”) published its Cybersecurity and Resiliency Observations. Cybersecurity and data protection for market participants have been key focuses of OCIE for several years. These observations provide useful insights into OCIE’s examination priorities in these areas. OCIE compiled these observations … Continue Reading

Proskauer Private Investment Funds Group Releases 2019 Annual Review and Outlook

By Anthony M. Drenzek on November 27, 2019 Posted in Compliance, Disputes, Hedge Funds, OCIE, Private Equity, Private Equity Litigation, Regulation, SEC, Securities Law, Venture Capital

Proskauer’s Private Investment Funds Group recently released its 2019 Annual Review and Outlook for Hedge Funds, Private Equity Funds and Other Private Funds. This yearly publication provides a summary of some of the significant changes and developments that occurred in the past year in the private equity and hedge funds space, as well as certain … Continue Reading

The Top Ten Regulatory and Litigation Risks for Private Funds in 2019

By Timothy W. Mungovan, Samuel J. Waldon, Joshua M. Newville, Michael R. Hackett, Anthony M. Drenzek, William D. Dalsen, Brian A. Hooven, Alexandra V. Bargoot, Lucy C. Wolf and Hena M. Vora on February 20, 2019 Posted in Compliance, Disputes, Examinations, Hedge Funds, Mergers & Acquisitions, OCIE, Private Credit, Private Equity, Private Equity Litigation, Regulation, SEC, Securities Law, Uncategorized, Venture Capital

An increasingly sophisticated and active OCIE division, innovative market disruptors, a maturing credit cycle, and a philosophical change in how the private fund industry views and utilizes litigation are likely to lead to increased regulatory scrutiny and litigation risk for advisers (and their funds) in 2019. With that backdrop, we are pleased to present our … Continue Reading

SEC Staff Announces 2019 OCIE Examination Priorities

By Anthony M. Drenzek on January 15, 2019 Posted in Compliance, Hedge Funds, OCIE, Private Equity, Private Equity Litigation, Regulation, SEC, Securities Law, Venture Capital

The SEC’s Office of Compliance Inspections and Examinations has released its annual priorities publication for 2019. Containing both a look back at the program’s accomplishments for fiscal year 2018 and a look forward into its initiatives for 2019, this annual report sets out important guidance for private fund managers in administering their compliance programs and … Continue Reading

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