The term “big data” refers to data coming from a wide range of sources, including digitized public records, consumer activities, cellphones, industry trends and the “Internet of Things.” Although big data can be beneficial to fund managers, its use poses various compliance challenges in areas such as data privacy and security. Thus, it is not surprising that the SEC is not only increasingly relying on big data itself, but also reviewing managers’ use of big data in recent examinations – a trend that is expected to continue in 2020. The first article in this three-part series explores the big-data landscape and how fund managers can acquire and use big data. The second article analyzes issues and best practices surrounding the acquisition of material nonpublic information; web scraping; and the quality and testability of data. The third article discusses risks associated with data privacy, the acquisition of data from third parties and the use of drones, as well as ways fund managers can mitigate those risks. For more on big data, see “Survey Finds Widespread and Increasing Use of Alternative Data by Hedge Funds” (Oct. 17, 2019); and “FINRA RegTech Conference Examines AI and Big Data; Blockchain; and Regulators’ Views (Part One of Two)” (Mar. 21, 2019). On Wednesday, January 15, 2020, at 11:00 a.m. EST, the Hedge Fund Law Report will host a complimentary webinar, entitled “Best Practices for Private Fund Managers’ Use of Alternative Data.” Moderated by William V. de Cordova, Editor-in-Chief of the Hedge Fund Law Report, the panel will feature Adam Reback, director at Optima Partners; Stacey M. Brandenburg, shareholder at ZwillGen; and Jeffrey Neuburger, partner at Proskauer. The discussion will address issues including the pros and cons of generating or purchasing datasets; managing third-party data providers; complying with data privacy laws and cybersecurity guidance; and avoiding insider trading and other risks. To register for the webinar, click here.