SEC Enforcement Continues To Target Private Fund Advisers For Improper Fee Allocation

Making clear that it remains focused on misallocation of fees and expenses by private fund advisers, the SEC last week brought a settled administrative proceeding against Monomoy Capital Management, L.P., a New York-based private equity fund adviser, for allegedly charging portfolio companies of one of its funds for operations-related services without adequate disclosure. The case, in which Monomoy agreed to pay disgorgement, a penalty and prejudgment interest totaling nearly $2 million, is the latest in a series of SEC enforcement actions against private equity firms in recent years alleging failure to disclose fees and resulting conflicts of interest to investors.

Inadequate Disclosure