One hallmark of being a “broker” is the receipt of transaction-based compensation. In 2013, the SEC’s David W. Blass suggested that a private equity fund manager that receives transaction-based fees in connection with a fund’s acquisition of portfolio companies should register as a broker under the Securities Exchange Act of 1934. The SEC, however, did not provide additional guidance until a 2016 settlement with a private equity fund manager and its principal. The adviser allegedly received transaction-based compensation and engaged in traditional brokerage activities. Although the SEC also charged the adviser with a number of other violations, the press release announcing the settlement emphasizes that issue and quotes Andrew J. Ceresney, then Director of the SEC Division of Enforcement, who said, “The rules are clear: before a firm provides brokerage services and receives compensation in return, it must be properly registered within the regulatory framework that protects investors and informs our markets. . . . [The adviser] clearly acted as a broker without fulfilling its registration obligations.” This article summarizes the facts that led up to the SEC’s action, the alleged violations and terms of the settlement. For more on the relationship between transaction-based compensation and broker registration, see “Perspectives From In-House and Private Practice: Cadwalader Special Counsel Garret Filler Discusses Family Offices, Broker-Dealer Registration Issues and Impact of Capital, Liquidity and Margin Requirements (Part Two of Two)” (Aug. 25, 2016); “SEC No Action Letter Suggests That There May Be Circumstances in Which Recipients of Transaction-Based Compensation Do Not Have to Register As Brokers” (Feb. 21, 2014); and “Do In-House Marketing Activities and Investment Banking Services Performed by Private Fund Managers Require Broker Registration?” (Apr. 18, 2013).