The Securities and Exchange Commission has fined ClearPath Capital Partners LLC $65,000 for failing to comply with requirements related to the safekeeping of client assets and for its use of impermissible liability disclaimers in its advisory and private fund agreements.
ClearPath is an investment advisor to retail investors and private funds.
According to the SEC's order, ClearPath violated the federal securities laws in connection with the financial statement audits of private funds that the firm advised and its use of liability disclaimer language, commonly referred to as a hedge clause, in its advisory agreements and in private fund partnership and operating agreements.
From at least 2018 through 2022, "ClearPath failed to timely distribute annual audited financial statements prepared in accordance with Generally Accepted Accounting Principles ('GAAP') to investors in certain private funds that it advised," resulting in violations of the custody rule.
