The SEC has long viewed fund administrators, attorneys and auditors as “gatekeepers” that play an important role in preventing fraud and protecting investors. For example, the SEC took action against a fund administrator that allegedly missed multiple red flags during its 14‑month engagement as administrator of a hedge fund. Critically, the administrator agreed to offset trading losses incurred by the fund with a purported receivable from the fund’s manager without making any inquiries about the nature of the receivable. As a result, the investor account statements prepared by the administrator showed consistent positive performance and asset growth – even though the fund was actually losing money. As it happens, the administrator was involved at the very outset of what the SEC contends in a pending civil enforcement action against the fund’s manager and its principal is a Ponzi-like fraud that ran from 2018 until 2022. This article details the administrator’s alleged failures, the underlying fraud and the settlement with the SEC, with commentary from Adam S. Aderton, partner at Willkie Farr & Gallagher and former Co‑Chief of the Asset Management Unit of the SEC’s Division of Enforcement. See “Auditor and Engagement Partner Sanctioned for Inadequate Audit Procedures for Level 3 Assets” (Aug. 31, 2023); and “Gatekeepers and Service Providers Remain in the SEC’s Crosshairs” (Dec. 3, 2020).