According to Business Insider, the Securities and Exchange Commission is stepping up scrutiny of mutual fund investments in private companies, according to people with knowledge of the agency’s interest.
Questions:
- What has been the problem with mutual funds investing in companies like Airbnb or WeWork?
- Which case is notorious for spiking the SEC’s interest in the issue of illiquid securities?
- The SEC enacted rules earlier this year regarding mutual funds. Briefly summarize the issues that these focused on.
Source:
Saacks, B. and D. Campbell (2019). The SEC is scrutinizing whether mutual funds need to shed more light on stakes in unicorns like WeWork and Airbnb — and it could mean more protections for mom-and-pop investors. Business Insider, July 29 (Retrievable online at https://www.businessinsider.com/sec-steps-up-scrutiny-of-private-stakes-held-by-funds-2019-7)