Investment Funds partner Nathan J. Greene (New York) was quoted in an article, titled "How Can Hedge Fund Managers Rebut the Presumption of Materiality of Certain Disciplinary Events in Form ADV, Part 2?," in the January 5, 2012 issue of The Hedge Fund Law Report.

The article describes approaches that a hedge fund manager can take in arguing that certain legal or disciplinary events are not required to be disclosed in its registration filing, Form ADV. In the article, Greene cites SEC deficiency letter practice as a potential guidepost. He comments on the example of the SEC case against Aletheia Research and Management, Inc., in which the SEC charged that Aletheia violated the anti-fraud provisions of the Investment Advisors Act on 1940 by failing to disclose in RFP responses a recent SEC deficiency letter. Greene noted, “It’s difficult to determine the full scope of the underlying deficiency letter infractions that were allegedly not disclosed in the RFPs in that case, but it looks like the SEC had several issues with the firm—including a failure to complete annual acknowledgments of the code of ethics and failure to complete a custody audit on time. I’m not sure that too many practitioners would say that those narrow underlying infractions were material. However, the SEC clearly felt that they were, or at least it believed that the deficiency letter raising them was. So, you could reach the conclusion that some SEC action involves highly technical missteps and therefore does not need to be disclosed, but I think the Aletheia case suggests caution.”