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Marco Masotti Discusses New SEC Proposals for Funds Scrutiny With Law360
February 18, 2022
Private Funds Group Global Co-Head Marco Masotti was quoted in a Law360 article, “SEC’s Fund Disclosure Proposal Could Spark Pushback,” on how the private funds industry might react to new proposed SEC rulemaking calling for increased scrutiny of private capital markets through additional disclosure and compliance obligations.
“It’s one of the more all-encompassing and sweeping proposals that have come out of the SEC in this area,” Marco said. “We can have a reasonable debate about enhanced disclosure, but to intrude on the contractual negotiations and terms among sophisticated parties, I think is the real stretch.”
Marco also discussed one particular proposal that would ban fund advisers from seeking reimbursement or indemnification from investors in case of a breach of fiduciary duty or negligence, saying that fund managers need the protection offered by indemnity because they are being hired to take on risk.
“The SEC is intruding — and it is an overreach — on the indemnification standard,” he said.