UNITE HERE urges SEC investigation of Lone Star Funds

DALLAS--(BUSINESS WIRE)-- UNITE HERE has requested that the SEC investigate fees charged to limited partners by Lone Star Funds and Hudson Advisors, its affiliated servicer.

In a letter sent to the US Securities and Exchange Commission last week, UNITE HERE questioned why Lone Star appears to have shifted responsibility for services to Hudson from Lone Star, whether investors are aware of these shifts, and whether investors have received a full accounting of fees charged by Hudson.

The letter to the SEC can be found at www.pecloserlook.org.

UNITE HERE urged the SEC to investigate a number of questions, including:

• Do any fees or expenses charged to the Funds by Hudson offset the Management Fee paid by the Funds to Lone Star?
• Has Lone Star shifted expenses from itself to Hudson over the course of the life of its Funds? If so, has this been disclosed to investors?
• Did the SEC identify any “violations of law or material weaknesses in controls” in how Lone Star Funds and/or Hudson Advisors handled fees and expenses?

These concerns speak directly to issues raised by the SEC’s Acting Director of the Office of Compliance Inspections and Examinations on May 13, 2015 regarding the relationship between investment advisers and related parties. In his remarks, the Acting Director said that: “By far the most common deficiencies noted by our examiners in private equity relate to expenses and expense allocation. Many managers still seem to take the position that if investors have not yet discovered and objected to their expense allocation methodology, then it must be legitimate and consistent with their fiduciary duty.”

View source version on businesswire.com: http://www.businesswire.com/news/home/20150518006261/en/

UNITE HERE
Elliott Mallen, 312-656-5807
[email protected]

Source: UNITE HERE

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