The SEC recently entered a settlement order against a registered investment adviser and two of its principals arising out of their failure to disclose to investors in one of their funds that that fund was investing in another fund advised by the adviser. The manager also ran afoul of the custody rule by failing to timely deliver audited financial statements to the funds’ investors and failing to have those audits conducted by a qualified auditor. This article summarizes the SEC’s charges and the terms of the settlement. For other SEC enforcement actions stemming from undisclosed conflicts of interest, see “SEC Enters Final Judgments in Connection With Allegedly Fraudulent Scheme to Benefit One Fund at the Expense of Another” (Aug. 24, 2017); and “Appropriately Crafted Disclosure of Conflicts of Interest Can Mitigate the Likelihood of an Enforcement Action Against an Investment Adviser” (Oct. 15, 2015).