On October 28, 2013, the SEC entered into settlement orders with three registered investment advisers who were charged with violations of Rule 206(4)-2 (Custody Rule) under the Investment Advisers Act of 1940 (Advisers Act), and other Advisers Act provisions and rules. These enforcement actions, spurred by high-profile scandals as well as deficiencies uncovered during presence examinations of newly registered advisers, is emblematic of the SEC’s increasingly aggressive approach to enforcement. See “Recently Published SEC Risk Alert Reveals Significant Deficiencies In Custody Practices of Hedge Fund Managers and Other Investment Advisers,” Hedge Fund Law Report, Vol. 6, No. 10 (Mar. 7, 2013). This article summarizes the settlements entered into with two private fund managers that provide the most pertinent lessons for hedge fund managers. See also “How Does the SEC Approach Custody Issues in the Course of Examinations of Hedge Fund Managers?,” Hedge Fund Law Report, Vol. 5, No. 18 (May 3, 2012). In addition to the Custody Rule violations, the SEC also cited the fund managers for other significant Advisers Act violations (including a violation of Section 206(3) (with respect to an undisclosed principal transaction), style drift, making material misrepresentations in Form ADV, compliance program violations, and making improper distributions to investors). Importantly, in both settlement orders, the chief compliance officers (CCOs) of both firms agreed to statutory bars, demonstrating the SEC’s commitment to holding CCOs responsible for the compliance failures of their firms. See “Simon Lorne, Chief Legal Officer of Millennium Management LLC, Discusses the Evolving Roles, Challenges and Risks Faced by Hedge Fund Manager General Counsels and Chief Compliance Officers,” Hedge Fund Law Report, Vol. 6, No. 37 (Sep. 26, 2013).