An investment adviser, along with its founder and principal, manages money for several university endowments. In a recently settled enforcement proceeding, the SEC claimed that the adviser breached its fiduciary duty to two unnamed universities when handling their redemption requests. Among other things, the SEC alleged that the respondents unnecessarily delayed liquidation of the universities’ investments and favored non-redeeming investors over the exiting universities. The adviser also allegedly had inadequate compliance policies and procedures and violated SEC recordkeeping requirements. The settlement is an important reminder of the potential minefield that advisers face when satisfying redemptions, particularly those involving illiquid assets. This article details the circumstances surrounding the redemptions, the alleged violations and the terms of the settlement. See our three-part series on suspending withdrawal or redemption requests: “The 2008 Crisis Versus the 2020 Pandemic” (May 21, 2020); “Key Steps in the Process” (May 28, 2020); and “When and How to Lift the Suspension” (Jun. 4, 2020); as well as our two-part series “Six Criteria for Hedge Fund Managers to Evaluate Before Granting an Investor’s Request to Rescind Its Redemption”: Part One (Oct. 3, 2019); and Part Two (Oct. 10, 2019).