Burkle's Yucaipa Fund Gets $3 Million SEC Penalty Over Conflicts

(Bloomberg) -- An investment fund run by billionaire Ron Burkle will pay about $3 million to settle a U.S. regulator’s allegations that it failed to disclose conflicts of interest and misallocated fees.

The Yucaipa Master Manager didn’t properly inform investors of all costs tied to preparing tax returns and also failed to disclose conflicts tied to an unnamed consulting firm, the Securities and Exchange Commission said in a statement Thursday. Yucaipa, which oversees $2.67 billion, resolved the case without admitting or denying the SEC’s allegations.

Some of private equity’s biggest names, including Apollo Global Management LLC and KKR & Co., have been fined by the SEC over fee disclosures in recent years. Wall Street’s top regulator has focused on how firms inform investors about costs such as broken deal expenses.

Yucaipa agreed to pay a $1 million fine and about $1.9 million in disgorgement. The firm didn’t respond to a request for comment.

Burkle made his name in the 1980s and 1990s by buying and selling West Coast supermarket chains such as Food 4 Less, Alpha Beta, Ralphs and Fred Meyer. A prominent Democratic activist and fundraiser, he is currently the co-owner of the National Hockey League’s Pittsburgh Penguins and chairman of Relativity Sports LLC.

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