Managers’ allocations of expenses to their funds have been under near-continuous SEC scrutiny for the past several years. In a recent example, the SEC entered into a settlement order with NB Alternatives Advisers LLC (NBAA) after alleging that NBAA negligently violated the antifraud provisions of the Investment Advisers Act of 1940 by allocating all of the compensation expenses of certain employees to its funds, even though those employees had spent a small portion of their time doing other work. This article analyzes the terms of the SEC’s order. Although the order relates to improper expense allocation practices by a private equity adviser, the action offers lessons for all private fund managers. See “OCIE Risk Alert Warns of Six Most Frequent Fee and Expense Compliance Issues” (May 3, 2018); and “Steps Advisers Can Take to Minimize the Risk That a Routine SEC Examination Ends With a Referral to Enforcement: Five Key Priorities for OCIE (Part One of Two)” (Jan. 4, 2018).