US Securities and Exchange Commission settles administrative action against fund manager concerning use of fund assets to pay management company expenses

Purpose – To explain a recently settled administrative proceeding that the US Securities and Exchange Commission (SEC) brought against a private fund manager in connection with the use of fund assets to pay for the manager’s operating expenses. Design/methodology/approach – Explains the major takeaways from the settled case, and places them in the context of prior administrative proceedings and public statements from SEC staff. Findings – This case is the latest example of the SEC taking action against a private fund manager related to the improper deduction or allocation of expenses, and related disclosure lapses, and further cases are expected in the future. Practical implications – Private fund managers should examine their practices involving the reimbursement and allocation of expenses and related disclosures to fund investors. Originality/value – Practical guidance and explanation from experienced securities regulatory lawyers.