The SEC charged Vestech Partners LLC and two related unregistered investment advisers and their owner, Riadh Fakhoury, who purportedly managed venture capital funds and offered and sold dozens of such private fund vehicles (the "Vestech Funds") primarily to individual investors. The Vestech Funds each held securities in one or two portfolio companies. The SEC alleged that Vestech improperly assured current and prospective investors that their investments were “low risk, high return” by touting co-investments by established institutional investors in the same private technology companies that had not occurred, and misled current and prospective investors by overstating their own investment performance and omitting negative information from statements about at least three companies held by Vestech Funds. The respondents allegedly overstated performance claims regarding portfolio company exits, and omitted losses and important negative information regarding portfolio companies The SEC further charged the respondents with negligently failing to disclose certain conflicts of interest from their personal investments in the same portfolio companies in which the Vestech Funds invested, including: 1) that they personally stood to potentially lose millions if the funds did not make additional investments in the companies for operating capital; and 2) that Fakhoury received equity compensation from one portfolio company for successfully fundraising for the company. Fakhoury together with the advisers agreed to pay nearly $2.4 million in disgorgement, interest and penalties, and Fakhoury agreed to an associational bar. The SEC continues to identify and focus on conflicts of interest at private funds involving personal investments and compensation arrangements from fund portfolio companies. Compliance staff should be vigilant in monitoring for conflicts of interest as well as marketing materials and investor reporting that overstates investment track records and downplays risks.