ADVISER CHARGED WITH FAILING TO DISCLOSE FEES AND EXPENSES: Results in nearly $10 million in penalties and reimbursements

WHAT HAPPENED?

On December 20th, a private fund adviser, Global Infrastructure Management, LLC, was charged by the SEC for fee and expense disclosure failures. The SEC’s investigation revealed that Global provided investors with misleading and inconsistent statements about how they calculated management fees. Moreover, Global failed to offset certain portfolio company fees against management fees charged to clients which resulted in clients overpaying millions in additional management fees.

Global violated multiple sections of the Investment Advisers Act of 1940. Without admitting or denying the SEC’s findings, Global has agreed to pay $4.5 million penalty to settle the charges and has voluntarily repaid $5.4 million to its affected clients.

WHAT DOES THIS MEAN FOR ME?

It is important to have a solid compliance program to ensure that policies and procedures are being followed and that disclosures are consistent.  The Co-Chief of the SEC Enforcement Division’s Asset Management Unit, Adam Aderton, said “[r]obust compliance programs are critical to help ensure that clients are not misled and receive full and accurate disclosure.”
Fairview Investment Services provides ongoing testing and evaluations of adviser practices to ensure firms are remaining compliant with SEC regulations. If your firm requires assistance with understanding and implementing SEC regulations, we can help. We support registered investment advisers by creating and implementing comprehensive, sustainable compliance programs with the help of our in-house regulatory experts. Contact us today for more information about our services.

By | 2022-04-04T18:33:47-04:00 Mar 3rd, 2022|Fairview® Flash Reports|

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