SEC Charges Private Equity Adviser for Failing to Disclose Disproportionate Expense Allocations to Fund

The Securities and Exchange Commission today charged New Jersey-based investment adviser Energy Capital Partners Management LP (ECP) with allocating undisclosed, disproportionate expenses to a private equity fund it advises. ECP agreed to pay a $1 million penalty to settle the SEC charges and has voluntarily paid back more than $3.3 million to the fund. According to the SEC’s order, ECP led an investment consortium to acquire the stock of a public company in what is referred to as a take-private transaction. In connection with this transaction, which closed in March 2018, ECP agreed that third-party co-investors would not have to bear expenses related to a credit facility used to finance the transaction.