HomeNews & BlogMFA Files Amicus Brief in SEC v. Keener Urging Appeals Court to Reject District Court’s Overly Broad Definition of Dealer

MFA Files Amicus Brief in SEC v. Keener Urging Appeals Court to Reject District Court’s Overly Broad Definition of Dealer

WASHINGTON, DC– Managed Funds Association (MFA) filed an amicus brief in SEC v. Keener urging the US Court of Appeals for the Eleventh Circuit to reject the lower court’s holding that an entity is a dealer under the Securities Exchange Act of 1934 if its business is based on the buying and selling of securities. The amicus brief argues that the lower court’s reasoning would have unintended consequences that reach far beyond this case.

MFA argues that if the lower court’s holding stands, any professional investor or investment fund, such as a private fund or mutual fund, could potentially be considered a dealer. This would subject a professional investor or investment fund to a body of regulations that are inappropriate for their business. Additionally, it opens a professional investor or investment fund to potential liability for having previously engaged in ordinary investment activities. 

“The lower court’s decision on what constitutes a dealer is inconsistent with the regulatory regime established by Congress and is incompatible with the business models of alternative asset management funds,” said Jennifer Han, MFA Chief Counsel and Head of Global Regulatory Affairs. “Allowing the ruling to stand would create regulatory uncertainty, increase business risk, cost of capital, and systemic risk while reducing market competition, efficiency and price discovery. This ultimately harms investment funds and their investors, including pensions, foundations, and endowments. The amicus brief provides recommendations for how the appeals court can remedy the issue in a manner consistent with Congressional intent and SEC precedent.”

Read the full amicus brief here.


About the Global Alternative Asset Management Industry

The global alternative asset management industry, including hedge funds, credit funds, and crossover funds, has assets under management of $4 trillion (Q4 2022). The industry serves thousands of public and private pension funds, charitable endowments, foundations, sovereign governments, and other global institutional investors by providing portfolio diversification and risk-adjusted returns to help meet their funding obligations and return targets.

About Managed Funds Association

Managed Funds Association (MFA), based in Washington, DC, New York, and Brussels, represents the global alternative asset management industry. MFA’s mission is to advance the ability of alternative asset managers to raise capital, invest, and generate returns for their beneficiaries. MFA advocates on behalf of its membership and convenes stakeholders to address global regulatory, operational, and business issues. MFA has more than 170 member firms, including traditional hedge funds, credit funds, and crossover funds, that collectively manage nearly $2.2 trillion across a diverse group of investment strategies. Member firms help pension plans, university endowments, charitable foundations, and other institutional investors to diversify their investments, manage risk, and generate attractive returns over time.

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