Securities & Regulatory Enforcement

The U.S. Securities and Exchange Commission has voluntarily dismissed its first — and only — enforcement action tied to the 2016 Liquidity Rule. The case included charges that two independent fund directors aided and abetted the alleged violations, whom Stradley Ronon vigorously defended.

Partner Jan Folena, who led the defense of the directors, told BoardIQ, that “the SEC claimed that the directors failed in their oversight obligations. However, the board's oversight role is not to decide the liquidity of fund assets.” She also noted that the directors “complied with everything required under the language of the liquidity rule. That made the SEC's case difficult because they were required to prove the directors had to take actions that the rule did not require them to take."

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