Regulatory Forum

The Justice Department’s National Security Division (NSD) and the U.S. Attorney’s Office for the Southern District of Texas declined to prosecute private equity firm White Deer Management LLC and its affiliates after the firm discovered and voluntarily self-disclosed criminal violations of U.S. sanctions and export laws committed by a company it acquired, Texas-based Unicat Catalyst Technologies LLC. After acquiring a company with a hidden history of sanctions violations, this private equity firm uncovered the misconduct, stopped it, and quickly reported it to the government, leading to the successful prosecution of a senior executive. Unicat agreed to pay $3,882,797 to OFAC for its apparent violations of U.S. sanctions laws and agreed with OEE to pay a penalty of $391,183 for its violation of U.S. export control laws. The former CEO and co-founder of Unicat, Mani Erfan, pleaded guilty to conspiring to violate U.S. sanctions against Iran and other countries and foreign governments, as well as concealment and international promotional money laundering. As part of his plea, Erfan also agreed to pay a money judgment in the amount of $1,600,000.

OFAC has assessed a $215,988,868 civil monetary penalty against venture capital firm GVA Capital Ltd. for violations of OFAC's sanctions against Russia and for related reporting obligations. Between April 2018 and May 2021, GVA Capital knowingly managed an investment for sanctioned Russian oligarch Suleiman Kerimov while aware of his blocked status. GVA Capital also failed to comply with an OFAC subpoena during OFAC's investigation into this matter. The penalty amount reflects OFAC's determination that GVA Capital knowingly violated U.S. sanctions against Russia, as well as OFAC’s Reporting, Procedures, and Penalties Regulations conduct, and that the entity’s conduct was egregious and not voluntarily self-disclosed. This enforcement action highlights the Treasury Department’s increasing focus on venture firms and registered investment advisers, which will also be subject to full anti-money laundering (AML) controls under the Bank Secrecy Act (BSA) as of January 1, 2026.

The SEC withdrew multiple rule proposals that were previously approved under former Chairman, Gary Gensler, during his tenure, which saw a flurry of rulemaking that was widely criticized as too fast and aggressive. The withdrawn proposals include five that would have directly affected investment advisers and private fund managers, as well as others focused on broker-dealers or public companies. Of the significant rule proposals that Standish Compliance has closely followed for our clients, this leaves only the Customer Identification Program for RIAs and ERAs remaining open.

The SEC further extended the compliance date for amendments to Form PF until October 1, 2025. The Form PF amendments were adopted on February 8, 2024, with a compliance date slated for March 12, 2025. In January 2025, the SEC extended the compliance date to June 12, 2025, resulting in an extra year for annual filers and an extra quarter for large hedge fund quarterly filers to comply. The latest extension came just one day before the compliance date, purportedly to provide more time for filers to program and test for compliance with these amendments. However, Chairman Atkins noted that in addition to the extension, he had directed staff to undertake a comprehensive review of Form PF based on serious concerns about whether the government's use of the data reported in the form justifies the massive burdens it imposes on private fund managers. Assuming the October 1, 2025, compliance date stands, annual filers who submit Form PF in April will still be required to use the new form beginning in April 2026. Large hedge managers who are subject to quarterly Form PF filings will not be required to use the updated form for the Q2 filing that is due on August 29, 2025, but will be required to do so for the Q3 filing that is due on November 29, 2025, and subsequent filings.

In April 2025, the SEC published updates to its Form PF Frequently Asked Questions (FAQ) to address adjustments related to the 2024 amendments, answer new questions raised by the amendments, and withdraw certain FAQs that were no longer relevant after the amendments. The FAQ was further amended in June 2025 following the second extension to clarify timing and the compliance date. Standish Compliance will continue to monitor the status of the amended Form PF. If it moves forward, we will update our Form PF support spreadsheet and our own Form PF FAQ, as needed, which we will share with clients in advance of the submission dates for the new form.

The DOJ has issued guidelines governing investigations and the enforcement of the Foreign Corrupt Practices Act, following through on commitments made in President Trump’s February 10, 2025, Executive Order to reconsider the DOJ’s approach towards investigating and prosecuting the FCPA. These guidelines represent a targeting of FCPA enforcement and signal that the DOJ will be taking a “risk-based approach” in pursuing those matters it considers as most critical to U.S. interests. The new guidelines also continue to emphasize the importance of individual accountability, but create a window where such focus can allow for enhanced leniency with respect to corporations.

The first quarter of 2025 reflected a number of meaningful changes at the Securities and Exchange Commission (SEC or Commission) with more to come. Former Chairman Gensler departed the agency on January 20 upon President Trump’s inauguration. Trump has nominated Paul Atkins to serve as the next SEC Chairman. Atkins is a former SEC Commissioner who knows the agency well and is expected to be an effective leader. However, his Senate Banking Committee confirmation hearing did not come until very late in the quarter, as it was finally scheduled on March 27. During his hearing, Atkins shared his views on the current regulatory landscape. He noted that the recent regulatory environment stifles capital formation and indicated his desire to pivot from the SEC’s recent emphasis on aggressive enforcement. On April 3rd, the Committee approved his nomination along party lines which will move to the full Senate to vote.

January marked the transition between the priorities of the former Commission to the new Commission, with a few noteworthy enforcement cases pushed through before Chairman Gensler departed. For most of the quarter, the SEC was led by Republic Commissioner, Mark Uyeda, serving as Acting Chairman, Republican Commissioner, Hester Peirce, and a sole Democratic Commissioner, Caroline Crenshaw. In theory, the three-person composition could effectively have veto power over actions requiring a vote of the SEC because Commissioner Crenshaw can deny a quorum for any action she strongly opposes. However, if Atkins is confirmed, the Republican majority would no longer need the Democratic Commissioner, so it will be able to begin with formal rulemaking steps.

No significant rules were proposed or moved forward in the first quarter. Certain compliance dates that were scheduled for key regulatory filings in early 2025 were extended during the quarter. As is typical upon a change in administration, multiple senior staff left the agency in January coinciding with Gensler's departure. President Trump and the Department of Government Efficiency took aim at the SEC, among other federal agencies, resulting in hundreds of other SEC staff departures.