SEC enforcement investigations and actions often grow out of examinations conducted by the SEC’s Division of Examinations (EXAMS). There is close collaboration and coordination between the SEC’s Enforcement Division and EXAMS, particularly among the Enforcement Division’s Asset Management Unit, EXAMS’ Investment Adviser/Investment Company Group and the SEC’s Division of Investment Management.

SEC-regulated entities consistently turn to Dechert to help navigate the examination process and provide strategic guidance from beginning to end. Just as SEC examiners draw on the expertise of other SEC Divisions across the Commission, we draw on the legal, regulatory and enforcement expertise of our industry-leading practice groups to advise clients during the exam process. Dechert has a proven track record of helping clients head off enforcement referrals and investigations by conducting mock audits for clients pre-exam (with SEC exam and enforcement priorities in mind), addressing concerns raised by examiners in real time as they arise and adeptly responding to any findings and deficiencies.

Our team tracks and responds to the latest developments and EXAMS priorities, which often parallel the SEC’s other regulatory initiatives. Recent examinations have focused on a variety of issues, including fiduciary obligations, compliance programs, marketing practices, compensation arrangements, asset valuation, protection of client information, due diligence practices, custody, management of conflicts of interest and reporting obligations. We have a long history of successfully guiding investment advisers, registered investment companies, BDCs and broker-dealers throughout the process.

Dechert brings the following expertise to bear when guiding clients through SEC exams:

  • Strategic advice intended to manage the scope and direction of the examination.
  • Assistance with preparing the first-day presentation deck.
  • Conducting mock interviews with portfolio managers and other professionals to prepare for interviews with EXAMS staff.
  • Advising on responses to requests for information and assisting with document production.
  • Assistance with drafting the response to the findings letter – with an eye towards ending the matter with EXAMS and avoiding a referral to Enforcement.

Representative matters

  • Advise funds and advisers on potential and actual inspections and examinations, litigation and enforcement matters.
  • Represent investment adviser clients in SEC examinations covering issues such as fiduciary duties and conflicts of interest, fees and expenses, AI, digital investment advice and other technology-focused matters, marketing, performance advertising, valuation, trade allocation, ESG, custody and share class structures, among others.
  • Counsel newly registered advisers through their first exam as part of EXAMS’s focus on never-before-examined advisers. These are comprehensive exams designed to cover an adviser’s overall business activities.
  • Provide general guidance as to compliance requirements, SEC rules and interpretations, and other regulatory issues.