Thirteen Private Fund Advisers Penalized by SEC for Recurring Filing Failures


Investment Advisers and Recurring Filing Failures

The Securities and Exchange Commission announces settlements with more than a dozen registered investment advisers. The news comes amidst the investment advisers’ recurring filing failures to provide vital information.  For context, it is important that the SEC receive the information so they can monitor and assess risk.

According to the SEC, the advisers fail to file annual reports informing the agency about the private funds they advise. The sought after information includes the amount of assets under management, fund strategy, performance, use of proceeds, and derivative trading.  The law requires private fund advisers managing assets of $150 million or more to make annual filings. Over a multi-year time frame, the thirteen investment advisers are continually delinquent in their filings.  

“These advisers’ repeated reporting failures deprived the SEC of important information they were required by law to provide,”said Anthony S. Kelly, Co-Chief of the SEC Enforcement Division’s Asset Management Unit.  “We encourage investment advisers to take a fresh look at whether they are meeting their reporting obligations and adjust their compliance programs accordingly.”


The SEC uses the “Form PF” to monitor industry trends, inform rulemaking, identify compliance risks, and target examinations and enforcement investigations.  Most importantly, the SEC publishes quarterly reports with critical information and statistics from Form PF data. The data points inform the public on the private fund industry. The Financial Stability Oversight Council also receives Form PF data. The council use the data to guage systemic risks of hedge funds and other private funds.

Finally, the SEC’s order finds that the advisers repeatedly violate the reporting requirements of the Investment Advisers Act of 1940.  Without admitting or denying the findings, each of the advisers agree to censure, a cease and desist order, and a $75,000 civil penalty.  During the course of the SEC’s investigation, the advisers, to their credit, remediate their failures by submitting the requisite filings.