The SEC's 2027 exam plan names private funds and private placements

SEC examiners oversee more than 34,000 registrants, and their plan for fiscal 2027 puts private funds and private credit on the priority list, next to retail sales of illiquid products ^[1]. Three weeks earlier, the Commission proposed rules meant to bring more retail money into private-market strategies ^[3]. The same day, it sued a pre-IPO fund manager over the handling of investor money in funds that held SpaceX interests ^[5].

Examiners plan to check private fund fee math and newly registered advisers

For private fund advisers, the exam report says staff plan to test “the accuracy of fee and expense calculations” at the fund level and at the investment level ^[2]. The list also covers valuation methods, disclosure of fund-level credit lines and advisers that have never been examined ^[2].

For brokers, private placements are among the products examiners plan to review under Regulation Best Interest ^[2]. The report does not name Regulation D, and the list is not exhaustive ^[1][2].

The access proposals change fund rules and the accredited investor test

The Sept. 30 package would let registered advisers charge performance fees to more client types, including regulated funds, and would give interval funds more say over when they schedule repurchases ^[3].

The SEC also asked for comment on new paths to accredited investor status, including a FINRA exam now in development and credentials such as a CPA license or a CFA charter ^[3]. Comments are due 60 days after the releases are published in the Federal Register ^[3].

Its small business advisory committee scheduled an Oct. 27 meeting on IPO rules and Regulation Crowdfunding, including whether policy changes could “improve the exemption” ^[4]. Examiners plan to look at how crowdfunding portals arrange for third parties to hold investor money ^[2].

The Meyer complaint describes inflated statements and a missed capital call

The SEC sued Meyer Global Management and its CEO, Owen E.H. Meyer, in federal court in Manhattan under the Advisers Act's antifraud provisions ^[5]. The complaint says the firm raised at least $18.5 million from nearly 100 investors for pre-IPO funds and misappropriated at least $1.27 million across three schemes ^[6].

Starship VI investors got statements showing gains through September 2024 on a purchase that, according to the complaint, had been rejected ^[6]. At Starship X, a $46,020 capital call went unpaid, a court transferred the fund's SpaceX interests away, and investors were not told ^[6].

These claims are allegations in the SEC's complaint ^[6].

How to use this

For sponsors raising capital

1. Rebuild your fee calculations so an outsider can trace each charge from the operating agreement to the investor statement. Fee accuracy is the first private fund item on the exam list ^[2], and the complaint alleges that one Meyer fund paid about $114,000 more in management fees than investors had agreed to ^[6].
2. Send investors a written update within days when a planned investment fails or changes. The complaint says investors in Meyer's OpenAI fund went about six months without being told the deal had fallen through ^[6].
3. Keep a dated calendar of every capital call owed on underlying investments, with one person responsible for each. A missed $46,020 call cost the Starship X fund its entire SpaceX position, according to the complaint ^[6].

For investors in private deals

1. Ask who holds the fund's cash and who prepares your statements, and request a confirmation from the bank or fund administrator when the sponsor does both. In one Meyer fund the account showed a $0 balance from May to August 2023 while investors were told their capital was “safe” ^[6].
2. Compare the amount sold and investor count on the offering's Form D with what the sponsor tells you. The Portal lists 574 real estate offerings filed from Oct. 4 to Nov. 2, compiled from EDGAR, on its fund filings page ^[7].
3. When a broker recommends a private placement, ask in writing about its costs and the alternatives the broker considered. Examiners list private placements among the products they plan to check under Regulation Best Interest ^[2].