Although exempt reporting advisers are not subject to the full panoply of recordkeeping and reporting requirements of the Investment Advisers Act of 1940, they are still subject to its anti-fraud provisions and to examination by the SEC. For example, an exempt reporting adviser to venture capital funds recently came under SEC scrutiny for failing to calculate management fees in accordance with the terms of its funds’ governing documents, resulting in substantial fee overcharges. This article details the facts that gave rise to the enforcement proceeding, the adviser’s alleged violations and the terms of the SEC settlement order. See our three-part series on steps an exempt reporting adviser must take to transition to SEC-registered investment adviser status: “Registration Triggers and Building a Compliance Department” (Oct. 5, 2017); “Adopting Compliance Policies and Procedures” (Oct. 12, 2017); and “Registered Investment Adviser Status: Regulatory Filings, Updates to Fund Documents and Preparation for SEC Examination” (Oct. 19, 2017).