Hedge Fund Law Report quoted partners Christine M. Lombardo, Christine Ayako Schleppegrell, and John J. O’Brien in an article summarizing key takeaways from their panel discussion during the Morgan Lewis 2025 Hedge Fund Conference titled “Regulatory and Examination Priorities for Private Fund Advisers.” The panelists focused on recent changes at the Securities and Exchange Commission (SEC) and the agency’s evolving enforcement priorities.
“We have seen quite a bit of attrition at the agency, and it’s estimated that upwards of 20 percent of staff have left,” Christine Schleppegrell said. “To give you a sense of the numbers, the SEC had approximately 5,000 staff members across the country. So, 1,000 employees have left the agency either voluntarily or due to reductions in force.”
Christine Lombardo noted that “[s]ome of this attrition and cutting is actually impacting the [SEC’s] ability to get guidance issued on certain topics, or it will have an impact because you have a lot of people who had real institutional knowledge within the SEC, who have taken those buyouts and left.”
John remarked that “[t]he SEC’s [Los Angeles] office is very focused on making sure that registrants or private fund managers – to the extent that they’re touting AI as part of their investment process – are doing so in a way that is accurate as to that process.”