‘May’ You Take Us to the Cleaners? SEC Wants GPs to Use Definitive Language in Form ADV Brochures
Full report available here.
A recently published piece from Buyouts highlighted a push by the SEC for the use of definitive language in communicating with current and prospective clients. As an example, the article title asks, “Do you accelerate monitoring fees? Don’t say you ‘may’ in your Form ADV.”
Prompted by this article, we reviewed the most recently filed Brochure for Almanac Realty Investors:
- We find that the word ‘may’ appears 28 times across twelve pages.
- While some instances are clearly uncontroversial, it appears that others – such as in the discussions of waivers and commitment fees – could fall into the realm of cases where the SEC believes that the adviser should indicate that it engages in a certain practice, not that it ‘may.’
- Almanac Realty Investors’ Brochure does not discuss the use – or potential use – of subscription credit facilities.