The SEC has accused a Wisconsin-based private fund and its operators of fraud from their management of an illiquid portfolio consisting of gems, minerals and portfolio companies. The SEC filed a 12‑count complaint in the U.S. District Court for the Western District of Wisconsin alleging numerous alleged instances of fraud where a PE fund improperly collected more than $13 million in management fees based on inflated valuations and falsified performance reporting. The defendants also allegedly borrowed from the fund’s assets, loaned money to the fund at high interest rates, collected undisclosed services fees and failed to adhere to the investment strategies described to potential investors. This article outlines the salient points of the SEC’s complaint. See also “SEC Sanctions Investment Adviser and Principals for Using Fund Assets to Help an Affiliate and for Using Improper Valuation Adjustments to Boost Returns” (Nov. 8, 2018).