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Securities

Jun. 21, 2024

Analyzing the 5th Circuit’s Private Fund Rule reversal

The SEC adopted a rule in 2023 that required private fund managers to disclose certain information and documents to prevent fraud and conflicts of interest. A group of trade associations challenged the rule in the Fifth Circuit, which vacated the rule in 2024, finding that the SEC lacked authority and that the rule was not rationally connected to fraud prevention.

Ron S. Geffner

Partner, Sadis & Goldberg LLP

Shutterstock

On Aug. 23, 2023, the U.S. Securities & Exchange Commission (SEC) adopted the Private Fund Advisers; Documentation of Registered Investment Adviser Compliance Reviews (Rule). Shortly thereafter, a group of trade associations challenged the Rule in the U.S. Court of Appeals for the Fifth Circuit (Fifth Circuit), arguing that the SEC lacked authority to promulgate the Rule. On June 5, 2024, the Fifth Circuit vacated the Rule, eliminating...

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