This article explores the factual and legal contours of SEC administrative settlements with a fund administrator, as well as related enforcement actions against investment managers, to better understand the affirmative steps the SEC is expecting financial service providers to take to help root out fraud and misappropriation in the financial services sector.

The SEC’s administrative settlements with this fund administrator illustrate the SEC’s expanding focus on the “gatekeeper” function and signal the intent of the SEC to impute culpability for wrongdoing to fund administrators and other financial service providers simply for not doing enough to root out fraud and misappropriation in the financial services sector.

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