Maryland-based private equity firm Blackstreet Capital Management and its owner, Marry N. Gunty, will pay $3.1 million to settle charges that they engaged in brokerage activity and charged fees without registering as a broker-dealer and committed other securities law violations. Blackstreet and Gunty performed in-house brokerage services rather than using investment banks or broker-dealers to handle the acquisition and disposition of portfolio companies for a pair of private equity funds they advise. Blackstreet fully disclosed that it would provide brokerage services in exchange for a few, but failed to comply with the registration requirements to operate as a broker-dealer. An SEC investigation further found that Blackstreet and Gunty engaged in conflicted transactions and inadequately disclosed fees and expenses. SEC
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