A recent decision by the U.S. District Court for the Eastern District of New York granting the SEC’s motion for partial summary judgment against an affiliated registered investment adviser and broker-dealer and their principal emphasizes the importance the SEC places on obtaining client consent to cross trades among clients and principal transactions with client accounts in advance of such transactions. For recent resolution of another case brought by the SEC against a manager involving inter-fund transactions, see “SEC Settlement Emphasizes the Importance – and Limits – of Fund and Transaction Disclosure,” Hedge Fund Law Report, Vol, 8, No. 13 (Apr. 2, 2015). For more on transactions among hedge funds, see “Katten Forum Identifies Best Practices for Hedge Fund Managers Regarding Best Execution, Soft Dollars, Principal Trades, Agency Cross Trades, Cross Trades and Trade Errors,” Hedge Fund Law Report, Vol. 7, No. 10 (Mar. 13, 2014). For more on transactions between hedge fund managers and funds, see “When and How Can Hedge Fund Managers Engage in Transactions with Their Hedge Funds?,” Hedge Fund Law Report, Vol. 4, No. 45 (Dec. 15, 2011). This article provides a detailed discussion of the decision, then highlights the implications for the hedge fund industry arising out of the decision.