Senate Dems Want Bulletin on SEC Private Equity Goals

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By Rob Tricchinelli

July 14 — A group of Democratic senators asked the SEC to compile its recent private equity enforcement actions into an investor bulletin in order to better notify the public of agency priorities.

“Several troubling issues have come to light, such as advisors charging undisclosed fees and expenses, misallocating expenses, and failing to disclose conflicts of interest,” nine members of the Senate Democratic caucus said in a July 14 letter to Securities and Exchange Commission Chairman Mary Jo White.

The letter was signed by Sens. Jack Reed (R.I.), Jeff Merkley (Ore.), Sherrod Brown (Ohio), Al Franken (Minn.), Richard Durbin (Ill.), Elizabeth Warren (Mass.), Tammy Baldwin (Wis.), Patrick Leahy (Vt.) and Bernie Sanders (I-Vt.).

They asked the agency to summarize its enforcement actions against private equity firms in a way that makes them more accessible to investors, “so that these investors can have a more informed basis upon which to make their investment decisions.”

Fee, Expense Cases

SEC enforcers have gone after large private equity funds over fee matters, including a $39 million settlement in October with Blackstone Group LP for inadequate fee disclosures (195 SLD, 10/8/15). The agency also settled with Kohlberg Kravis Roberts & Co. in June 2015 on allegations it misallocated “broken-deal expenses” (125 SLD, 6/30/15).

Those enforcement actions, combined with comments from SEC officials that the agency is targeting firms that promise client fees with “rates at or below market rate, ” prompted the senators' letter.

The senators asked the SEC to respond by July 29. The agency didn't return a Bloomberg BNA request for comment.

To contact the reporter on this story: Rob Tricchinelli in Washington at

To contact the editor responsible for this story: Phyllis Diamond at

For More Information

For the letter, visit

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