Expense allocations between fund advisers and the funds they manage give rise to significant conflicts of interest.  The SEC remains keenly focused on such conflicts, paying particular attention to private equity advisers.  See “Acting OCIE Director Discusses the Office’s Focus on Private Equity Managers and Emphasizes the Importance of Disclosure by Advisers,” Hedge Fund Law Report, Vol. 8, No. 21 (May 28, 2015).  Blackstone was one of the latest casualties.  See “Blackstone Settles SEC Charges Over Undisclosed Fee Practices,” Hedge Fund Law Report, Vol. 8, No. 41 (Oct. 22, 2015).  In another recent settlement, the SEC claimed that two affiliated private equity fund advisers improperly allocated the advisers’ own legal, consulting and compliance expenses to the funds they managed without adequate disclosures.  This article summarizes the alleged misconduct that gave rise to the enforcement action, the SEC’s specific charges and the sanctions imposed.  For more on conflicts of interest involving fee and expense allocations, see “Recommended Actions for Hedge Fund Managers in Light of SEC Enforcement Trends,” Hedge Fund Law Report, Vol. 8, No. 41 (Oct. 22, 2015); and “RCA Panel Highlights Conflicts of Interest Affecting Fund Managers,” Hedge Fund Law Report, Vol. 8, No. 26 (Jul. 2, 2015).  Other SEC enforcement actions have involved other types of adviser fees and expenses.  For a recent enforcement action involving monitoring fees and related fee offsets, see “Full Disclosure of Portfolio Company Fee and Payment Arrangements May Reduce Risk of Conflicts and Enforcement Action,” Hedge Fund Law Report, Vol. 8, No. 44 (Nov. 12, 2015).  For a proceeding involving broken deal expenses, see “SEC Enforcement Action Involving ‘Broken Deal’ Expenses Emphasizes the Importance of Proper Allocation and Disclosure,” Hedge Fund Law Report, Vol. 8, No. 27 (Jul. 9, 2015).