When an investor raises a complaint, fund managers often scramble to hastily address and soothe the investor’s concerns. That’s the nature of client relationship management, particularly in today’s ruthlessly competitive fundraising environment. It is important, however, for fund managers to balance being responsive with their fiduciary duty to carefully and accurately describe all matters related to their funds – especially quantitative items such as disputed performance data. The significance of that lesson was emphasized anew by the SEC when the agency released two orders settling cease and desist actions against an investment adviser and one of its principals (together, the Orders) for material misstatements and omissions made in response to queries raised by an institutional investor client. Ultimately, the series of fraudulent responses by the adviser and its representatives caused the institutional investor to inadvertently breach its statutory obligations. Although the fact pattern is unique, the Orders highlight the degree to which the SEC may scrutinize fund managers’ communications with investors generally, as well as the importance of ensuring the accuracy of performance calculations, performance reporting and any other information provided to investors. This article summarizes the key features of the Orders and provides additional insights from industry experts. For more on communicating with investors, see our two-part series “How Are Your Peers Responding to the Most Intrusive Requests From Hedge Fund Investors?”: Part One (Mar. 17, 2016); and Part Two (Mar. 31, 2016).