On September 9, 2025, the U.S. Securities and Exchange Commission (SEC) filed a case in the U.S. District Court of Colorado against an investment manager, alleging negligent misconduct stemming from conflicted related-party transactions.
The SEC charged Tomislav Vukota and his two advisory firms, Vukota Capital Management, LLC (VCM) and VCM Global Asset Management Ltd. (VGAM), for breaches of fiduciary duty and misrepresentations to private fund investors. According to the SEC’s complaint, from at least 2017 through May 2022, the defendants caused various private funds under their advisement to make short-term loans to VCM at below-market rates to cover cash shortfalls at other funds.
These loans were prohibited by the funds’ partnership agreements, and the conflicts of interest were never disclosed to investors. Additionally, during early 2021, Vukota and VCM sent misleading buyout letters to investors, failing to disclose conflicts of interest and obtain consent. The firms also made material misstatements in marketing and offering materials, including the existence of an auditor, assets under management, investment strategy, and regulatory filing status. The SEC emphasized that these failures compromised investor decision-making and violated fiduciary obligations.
The SEC’s recent enforcement action underscores several critical points for registered investment firms. Related-party transactions are considered high-risk and require careful benchmarking and disclosure, even when not explicitly mandated, to fulfil fiduciary duties. Adviser-held asset purchases and continuation funds carry significant disclosure obligations. Any potential conflicts affecting pricing must be communicated to investors and valuation agents, regardless of investor approval. Finally, the SEC continues to prioritize enforcement against private fund advisers, demonstrating a willingness to pursue cases based on conflicts of interest or even pure negligence.
Petra Funds Group’s compliance team has decades of experience managing SEC regulatory compliance programs for private fund advisers. The group’s expertise enables it to provide insight and guidance on a wide range of regulatory compliance services, from conflicts of interest documents to investment adviser registration to ongoing compliance support. Learn more about Petra’s comprehensive compliance offering here and contact Jesse Brown with questions.
The SEC’s updated Regulation S-P introduces new rules for incident response, service provider oversight, breach notifications, and recordkeeping.
For emerging private fund managers, understanding the U.S. Securities and Exchange Commission (SEC) registration requirements and adviser status designations is critical.