The SEC settled charges against a private equity firm ("Firm") last week for $20.5 million. The SEC's order stated that the Firm failed to adequately disclose to investors in its real estate funds that the real estate brokerage used by (and receiving fees from) the funds were owned by the Firm's CEO.

Specifically, the funds' Limited Partnership Agreements, PPMs, and due diligence questionnaires failed to adequately disclose that the funds paid 3% real estate brokerage fees to a brokerage wholly owned by the Firm's CEO.

This action is a reminder that the SEC is continuing to closely scrutinize private securities offerings and will exercise its authority against funds and any other companies that do not disclose conflicts of interest to their investors.