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Hedge Fund Legal & Compliance Digest Quotes Adrienne Ward on Protecting Sensitive Data from SEC FOIA Requests

September 12, 2017

Olshan Litigation partner Adrienne Ward was quoted in Hedge Fund Legal & Compliance Digest on how hedge fund managers can protect sensitive and proprietary data from requests by the Securities and Exchange Commission under the Freedom of Information Act (FOIA). Within specified guidelines, FOIA grants the public access to federal agency records, including those of the SEC, and such dissemination could prove detrimental for hedge funds’ trading strategies and the privacy of funds’ investors. Luckily, Ms. Ward explains, the SEC and hedge fund managers seeking to protect confidential information may have congenial interests: “I think as an agency, the SEC is historically recalcitrant to comply with FOIA requests. They rarely will provide the information. The SEC will lean heavily on its own privilege in the sense of law enforcement. Rather than trying to determine whether a hedge fund manager has properly designated their materials as confidential, the SEC will assert its own law enforcement privilege in denying these requests.” The discussion with Ms. Ward includes practical tips for tracking and protecting electronic data provided to the SEC, which can be a challenge in responding to a time sensitive subpoena or examination request, because the “fund ends up doing a document dump.” Ward concludes that, “A FOIA request triggers a notice requirement to the party that had requested confidential treatment. You will then have the opportunity to identify the person seeking the information. If it’s a competitor, you have a good chance of keeping the information confidential, because there is no good reason why a competitor would need sensitive information about another fund manager.”


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