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

Abstract

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.

Citation

Pershkow, A.W. and Kanter, A.D. (2015), "US Securities and Exchange Commission settles administrative action against fund manager concerning use of fund assets to pay management company expenses", Journal of Investment Compliance, Vol. 16 No. 4, pp. 55-58. https://doi.org/10.1108/JOIC-08-2015-0050