Another topic that is always top-of-mind for the SEC is conflicts of interest – especially proper disclosure of those conflicts. In fact, a substantial portion of the SEC’s Interpretation Regarding Standard of Conduct for Investment Advisers focuses on the appropriate identification and disclosure of conflicts of interest in accordance with an adviser’s fiduciary duty. See our three-part series on navigating the interpretation: “What It Means to Be a Fiduciary” (Oct. 17, 2019); “Six Tools to Systematically Identify Conflicts of Interest” (Oct. 24, 2019); and “Three Tools to Systematically Monitor Conflicts of Interest” (Nov. 7, 2019). For example, in a settled SEC enforcement proceeding, the SEC claimed that an investment adviser used clients’ soft dollars to purchase investment software from a company controlled by the firm’s chief investment officer without disclosing that conflict of interest to its clients. This article analyzes the SEC settlement order. For other enforcement actions involving undisclosed conflicts of interest, see “SEC Sanctions Adviser for Undisclosed Conflicts and Misleading Form ADV” (Jun. 3, 2021); “Advisers Must Disclose Conflicts of Interest and Heed the Terms of Client Agreements, or Risk Stiff SEC Sanctions” (Jun. 28, 2018); “Failure to Disclose Fees Received From Third-Party Broker-Dealers May Result in Significant Penalties for Investment Advisers” (Apr. 13, 2017); and “Advisers Investing Client Assets in Affiliated Funds Could Face SEC Scrutiny for Conflicts of Interest” (Oct. 13, 2016).