Industry Updates

Gibson Dunn files reply brief in lawsuit against the SEC regarding private fund adviser rule

Tuesday, January 23, 2024

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Opalesque Industry Update - Gibson, Dunn & Crutcher LLP filed the reply brief on behalf of the National Association of Private Fund Managers, Alternative Investment Management Association Ltd., American Investment Council, Loan Syndications and Trading Association, MFA, and National Venture Capital Association in the U.S. Court of Appeals for the Fifth Circuit in response to the SEC brief in the case.

In the reply brief, the petitioners maintain their position that the rule should be vacated in whole, as it exceeds the SEC's statutory authority, is arbitrary and capricious, and is otherwise unlawful. Specifically, the petitioners argue that the SEC:

• Improperly attempts to regulate the terms of the relationship between private funds and their investors by misreading certain provisions of Dodd-Frank and the Investment Advisers Act;

• Failed to employ reasoned decision making;

• Deprived the petitioners of a meaningful opportunity to comment on the final rule, which was not a logical outgrowth of the proposed rule; and

• Repeatedly and purposefully refuses to address the rule's ultimate effects on competition and capital formation.

Oral argument will be held on February 5 in New Orleans, Louisiana.

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