# kaal:claim:2811718-040

**Claim.** Despite bringing enforcement actions over misrepresentations about due diligence, the SEC has not taken a rigid enforcement position on whether particular due diligence industry practices are effective, and has merely acknowledged that practices became more robust after the financial crisis.

**Type.** failure  **Support.** evidenced

**Holds when.**

- SEC enforcement posture as of 2016

**Source quote.**

> Despite a number of enforcement actions that deal with misrepresentation in relation to due diligence,46 the SEC has not taken a rigid enforcement position on the effectiveness or ineffectiveness of due diligence industry practices.

**From.** Wulf A. Kaal, *Private Fund Investor Due Diligence – Evidence from 1995 to 2015* (2016), II. Private Fund Investor Due Diligence, page 15

**Cite as.** Wulf A. Kaal, Private Fund Investor Due Diligence – Evidence from 1995 to 2015 (2016). SSRN: https://ssrn.com/abstract=2811718

**Verify.** sha256 of source PDF `b52152af561288173840a1cabbcf8f4b337e73507c856ee01600799073f4156f` at https://raw.githubusercontent.com/wulfkaal/Academic-Papers/main/papers/pdf/Kaal%20-%202016%20-%20Private%20Fund%20Investor%20Due%20Diligence%20%E2%80%93%20Evidence%20from%201995%20to%202015.pdf

**Failure mode.** regulator declines to set effectiveness standard  (family: enforcement-gap)

**Topics.** securities-law, compliance, law-and-legal-systems

**Keywords.** sec-enforcement, regulatory-gap, industry-practice, legal-standards

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