During the past few months, the private-equity and hedge fund industries have been getting the white-glove test from the Securities and Exchange Commission, and the SEC is turning up plenty of dirt.
In December, the Commission announced charges against a half-dozen hedge fund managers or partners for improper use of fund assets, fraudulent valuations, and misrepresenting fund returns. The charges stemmed from the SEC’s Aberrational Performance Inquiry. As its title indicates, the program works to combat fraud by identifying abnormal investment performance.
