Recent SEC Enforcement Actions Reflect a Continuing Focus on Expense Allocation and Conflicts of Interest
The U.S. Securities and Exchange Commission (“SEC”) recently settled three enforcement actions against investment advisers alleging misallocation of expenses and failure to disclose conflicts of interest. While the actions do not break new ground, they reflect the SEC’s continuing focus on these areas and serve to highlight some of the types of expense allocation practices and undisclosed conflicts of interest that continue to draw regulatory scrutiny. This memorandum summarizes these three enforcement actions and some key takeaways for investment advisers.