The SEC announced charges against private equity and venture capital fund manager, Closed Loop Partners, LLC, for failing to properly disclose and gain consent for certain client loan transactions involving conflicts of interest. Closed Loop was further charged with violations of the Custody Rule 206(4)-2 of the Investment Advisers Act for failing to engage an independent, PCAOB-registered accounting firm on a timely basis to conduct an annual audit of the financial statements for certain co-investment vehicles and a fund-of-one. Because the firm did not satisfy the requirements of the audited financial provision of the Custody Rule, Closed Loop was required to comply with other provisions of the rule, which it failed to do. The firm consented to a $250,000 penalty.