The SEC charged Derek R. Taller, principal officer, director, and investment adviser to a registered business development company (BDC) and private fund, with fraud. The SEC alleged that Taller disseminated fund offering documents that contained multiple misrepresentations, including that the fund was supervised by an independent board of directors and its financial statements would be audited by an independent auditor. According to the complaint, these representations were false, as the fund never engaged an independent auditor, and Taller was the only active board member for more than a year and a half. Taller allegedly acquired an interest in a third-party startup and, days later, directed the funds to loan the startup a combined $2 million without disclosing to the funds or their investors his interest in the borrower. According to the complaint, these loans constituted a joint arrangement, for which the BDC was required to obtain an SEC order prior to entering into such transactions, which Taller never sought. Moreover, Taller allegedly misappropriated hundreds of thousands of dollars from the funds he advised. While the facts in the case represent egregious activity, the SEC continues its focus on undisclosed conflicts of interest resulting from related party investments and activities, and misrepresentations to fund investors regarding fund governance and audits.