Apex Fund Services agreed to settle two enforcement actions by the Securities and Exchange Commission alleging that it ignored red flags and enabled fraudulent conduct by investment advisers and private funds they managed. Apex is a fund administration company located in New Jersey. In one action, the SEC charged that Apex enabled Clearpath Wealth Management, LLC, an investment adviser, and its president, Patrick Churchville, to engage in allegedly fraudulent conduct; Clearpath and Mr. Churchville are currently respondents in a separate SEC action in federal court in Rhode Island. According to the SEC, Clearpath and Churchville managed four private funds that engaged Apex in December 2011. Subsequently, claimed the SEC, Apex “ignored or missed red flags including undisclosed brokerage and bank accounts, related party transactions, inter-series and inter-fund transfers in violation of fund offering documents, and undisclosed margin or credit agreements.” As a result, Apex did not correct previously issued (but erroneous) accounting reports and capital statements that were used by Clearpath to communicate with investors and were provided to the fund’s independent auditor. In addition, the SEC separately charged Apex in connection with its accounting and administrative services to EquityStar Capital Management, LLC, an investment adviser, and its managing member, Steven Zoernack. Among other things, EquityStar and Mr. Zoernack made undisclosed and impermissible withdrawals of more than US $1 million from funds they managed, said the SEC. According to the SEC, from May 2012 through June 2014, Apex accounted for these withdrawals as receivables without any evidence that EquityStar or Mr. Zoernack would repay the amounts withdrawn. Apex provided financial statements to investors of the funds that did not identify or discuss the magnitude of the withdrawals. In both cases, the SEC charged that Apex’s conduct “was a cause” of the investment advisers and principal’s wrongful conduct. Apex agreed to pay fines and disgorgement totaling US $352,000 and to retain an independent consultant to resolve the SEC’s charges.