Steven Cooperman Quoted in Buyouts Insider on Proposed SEC Rules’ Effect on Private Fund Managers

Chair and Co-Managing Partner Steven Cooperman was quoted in a May 2, 2022 Buyouts Insider article entitled “SEC Proposed Rules on GP Indemnification Cause Jitters with Insurers.” The article discusses recent proposed SEC regulations that would prohibit the practice of fund sponsors seeking indemnification from the funds they manage for certain claims and the potential effect on insurers who provide coverage for the private equity industry.

Under the proposed SEC rules, private fund managers would be prohibited from seeking indemnification against claims related to breaches of fiduciary duty, negligence, bad faith, and similar charges. Steve explained that negligence requires a lower hurdle than gross negligence, which is the current market norm. “That has raised a lot of eyebrows,” he stated. “If it turns out that a manager made a bad investment in the fund, the GP’s behavior could come under much greater scrutiny under the definition of ordinary negligence.”

Read the article here.