Private equity manager The Blackstone Group will pay out $39 million as part of a settlement with the Securities and Exchange Commission over failing to disclose hidden fees to its investors. This sum will settle charges stemming from an SEC investigation, which found that three entities of the Blackstone Group– Blackstone Management Partners, Blackstone Management Partners III, and Blackstone Management Partners IV– had not disclosed accelerated monitoring fees.

The Blackstone Group agreed to the SEC finding, without having to admit guilt, and settled on a civil penalty of $10 million. The other $29 million dollars named in the settlement are to be distributed to investors affected by their advisor’s alleged questionable practices. Regulators also called into question the private equity manager’s practice of taking discounted legal fees without passing on these savings to its funds.

The SEC investigation may be a sign of the changing shape of the finance world. As private equity management moves up the pecking order on Wall Street, the major managers are going to be facing more scrutiny from regulators.

In a press release regarding the Blackstone situation, Andrew J. Ceresney, the Director of the SEC’s Division of Enforcement, said, “Full transparency of fees and conflicts of interest is critical in the private equity industry and we will continue taking action against advisers that do not adequately disclose their fees and expenses.”

For a company bringing in billions of dollars in profit, $39 million might not seem like a lot, but companies know how costly an SEC violation can be to their bottom line. It is very important to be transparent in the disclosure of fees and conflicts of interest.  Make sure to discuss your disclosures with a seasoned securities attorney in order to avoid the costs associated with litigation.