In the Matter of Coachman Energy Partners LLC, et al. Admin. Proc. File No. 3-18109
Sept. 1, 2022
On August 14, 2017, the Commission instituted and simultaneously settled administrative and cease-and-desist proceedings (the “Order”) against Coachman Energy Partners LLC (“Coachman”), a registered investment adviser for four private oil and gas funds, and its chief executive officer and manager, Randall D. Kenworthy (“Kenworthy”) (collectively, the “Respondents”). In the Order, the Commission found that, from, 2011 to 2014, Coachman failed to adequately disclose its methodology for calculating the management fees and management-related expenses it charged to the funds. As a result of its inadequate disclosures, Coachman overcharged the funds approximately $1.1 million in management fees and $449,000 in management-related expenses. Additionally, Coachman, through Kenworthy, caused one of the funds to enter into a transaction with an affiliated entity without properly disclosing or obtaining investor consent to the conflicts of interest associated therewith.
The Commission ordered Coachman to pay a total of $891,507.00 in disgorgement and prejudgment interest (the “Distribution Fund”), pursuant to a three year payment plan outlined in the Order. The Respondents were also each ordered to pay a $50,000.00 civil money penalty to the Commission for transfer to the U.S. Treasury.
Coachman is responsible for distributing the Distribution Fund in accordance with the Order. Tax compliance and any related administrative expenses are the responsibility of Coachman. The Order requires that Coachman submit to the Commission staff a final accounting and certification of the disposition of the Distribution Fund within 45 days after the completion of the disbursement of the Distribution Fund. See the Commission’s Order: Release No. IA-4743.
For more information, please contact the Commission:
Office of Distributions