Private fund managers face conflicts of interest and regulatory risks when they allocate fees and expenses among themselves, the funds they manage and portfolio companies of those funds.  See “All-Star Panel at RCA PracticeEdge Session Analyzes Five Key Regulatory Challenges Facing Hedge Fund Managers,” Hedge Fund Law Report, Vol. 7, No. 37 (Oct. 2, 2014).  A recent presentation covered the statutory and regulatory regime that governs expense allocations and disclosures, the consequences of failing to comply with that regime, best practices in regard to expense allocations, investor due diligence, and how to respond to discovery of allocation errors or deficiencies in policies and procedures.  In examinations, speeches and other contexts, the SEC has been focusing on fee and expense allocations by private fund managers.  See “Top SEC Officials Discuss Hedge Fund Compliance, Examination and Enforcement Priorities at 2014 Compliance Outreach Program National Seminar (Part Three of Three),” Hedge Fund Law Report, Vol. 7, No. 9 (Mar. 7, 2014).  For a comprehensive overview of the regulatory and practical issues concerning allocation of fund and manager expenses, see “How Should Hedge Fund Managers Approach the Allocation of Expenses Among Their Firms and Their Funds? (Part One of Two),” Hedge Fund Law Report, Vol. 6, No. 18 (May 2, 2013); and Part Two.  For a comprehensive discussion of the allocation of Form PF expenses in particular, see “How Should Hedge Fund Managers Allocate Form PF Expenses Between Their Hedge Funds and Their Management Entities?,” Hedge Fund Law Report, Vol. 5, No. 25 (Jun. 21, 2012).