Failing to disclose conflicts of interest and making misleading disclosures about conflicts remain disturbingly frequent grounds for SEC enforcement action. In a recent example of this perennial minefield, an investment adviser and its principal allegedly failed to disclose loan arrangements that incentivized them to recommend the lender’s securities to the adviser’s clients and misled a client as to how they planned to use the proceeds of a client’s investment with the adviser. This article analyzes the facts that form the basis of the enforcement action and the SEC’s settlement order. See “Identifying and Addressing the Primary Conflicts of Interest in the Hedge Fund Management Business” (Jan. 17, 2013).