A recent SEC enforcement action is a reminder that fund advisers must be scrupulous in their valuation and disclosure practices, even when winding down a fund. A private equity adviser proposed to liquidate one of its funds through an in-kind distribution using the fund’s year-end net asset value for the prior year, but it later abandoned that proposal. The adviser then learned of a possible material increase in the valuations of the fund’s two remaining portfolio companies. The SEC claimed that, in conjunction with a subsequent offer to purchase the investors’ remaining interests in the fund at the prior year’s valuation, the adviser failed to disclose the new valuation information. This article details the alleged misconduct and the terms of the SEC settlement order. See our two-part series on winding down funds: “How Managers Make the Decision and Communicate It to Investors and Service Providers” (Mar. 2, 2017); and “Navigating Illiquid Assets, Unanticipated Windfalls and Fees and Expenses During Liquidation” (Mar. 16, 2017).