In re Kohlberg Kravis Roberts &

 
 
 
 
UNITED STATES OF AMERICA 
Before the 
SECURITIES AND EXCHANGE COMMISSION 
 
INVESTMENT ADVISERS ACT OF 1940 
Release No. 6814 / January 13, 2025 
 
ADMINISTRATIVE PROCEEDING 
File No. 3-22401 
  
 
In the Matter of 
 
Kohlberg Kravis Roberts & 
Co. L.P., 
 
Respondent. 
 
ORDER INSTITUTING ADMINISTRATIVE 
AND CEASE-AND-DESIST PROCEEDINGS, 
PURSUANT TO SECTIONS 203(e) AND 
203(k) OF THE INVESTMENT ADVISERS 
ACT OF 1940, MAKING FINDINGS, AND 
IMPOSING REMEDIAL SANCTIONS AND 
A CEASE-AND-DESIST ORDER 
 
I. Introd uc tion 
 The Securities and Exchange Commission (“Commission”) deems it appropriate and in the 
public  interest  that  public administrative  and  cease-and-desist  proceedings  be,  and  hereby  are, 
instituted pursuant to Sections 203(e) and 203(k) of the Investment Advisers Act of 1940 (“Advisers 
Act”) against Kohlberg Kravis Roberts & Co. L.P. (“KKR” or “Respondent”). 
 
II. Cons ent 
 In anticipation of the institution of these proceedings, Respondent has submitted an Offer 
of Settlement (“Offer”) that the Commission has determined to accept.  Respondent admits the 
facts set forth in Section III below, acknowledges that its conduct violated the federal securities 
laws, admits the Commission’s jurisdiction over it and the subject matter of these proceedings, and 
consents to the entry of this Order Instituting Administrative and Cease-and-Desist Proceedings, 
Pursuant to Sections 203(e) and 203(k) of the Investment Advisers Act of 1940, Making Findings, 
and Imposing Remedial Sanctions and a Cease-and-Desist Order (“Order”), as set forth below.   
 
III. Fac ts 
 
 On the basis of this Order and Respondent’s Offer, the Commission finds
1
 that 
 
 
 
 
                                                 
1
  The findings herein are made pursuant to Respondent’s Offer of Settlement and are not 
binding on any other person or entity in this or any other proceeding.  

 
 
2 
 
Summary 
 
1. The federal securities laws impose recordkeeping requirements on registered 
investment advisers to ensure that they responsibly discharge their crucial role in our markets. The 
Commission has long said that compliance with these requirements is essential to investor 
protection and the Commission’s efforts to further its mandate of protecting investors, maintaining 
fair, orderly, and efficient markets, and facilitating capital formation. 
 
2. These proceedings arise out of the failure of Respondent’s personnel, including at 
senior levels, to adhere to certain of these essential requirements and the Respondent’s policies and 
procedures. Using their electronic devices, these personnel communicated both internally and 
externally by text messages and/or other unapproved written communications platforms (“off-
channel communications”). 
 
3. From at least December 2019 (the “Relevant Period”), personnel at KKR sent and 
received off-channel communications that, among other things, related to recommendations made 
or proposed to be made and advice given or proposed to be given in its advisory business.  KKR 
did not maintain or preserve these off-channel communications. These recordkeeping failures were 
firm-wide and involved personnel at various levels of authority. As a result, KKR violated Section 
204 of the Advisers Act and Rule 204-2(a)(7) thereunder. 
 
4. KKR’s failure to implement procedures reasonably expected to prevent off-
channel communications led to KKR’s failure to reasonably supervise its personnel within the 
meaning of Section 203(e)(6) of the Advisers Act. 
 
5. During the Relevant Period, KKR received and responded to Commission records 
requests in Commission investigations. The recordkeeping failures of KKR and its investment 
adviser affiliates may have impacted the Commission’s ability to carry out its regulatory functions 
and investigate violations of the federal securities laws. 
 
6. The Commission staff found KKR’s recordkeeping failures after commencing a 
risk-based initiative to investigate the use of off-channel and unpreserved communications at 
registered investment advisers. KKR has initiated a review of its recordkeeping failures and begun 
a program of remediation.  
 
Respondent 
             7.  KKR is a Delaware limited partnership, with its principal office in New York, 
New York, that has been registered with the Commission as an investment adviser since 2008. 
KKR & Co. Inc., a Delaware corporation, with its principal office in New York, New York, is 
the parent of KKR. 
 
 

 
 
3 
 
Recordkeeping Requirements Under the Advisers Act 
 
8. Section 204 of the Advisers Act authorizes the Commission to issue rules requiring 
investment advisers to make and keep for prescribed periods, and furnish copies of, such records as 
necessary or appropriate in the public interest or for the protection of investors. 
 
9. The Commission adopted Rule 204-2 pursuant to this authority. This rule specifies 
the manner and length of time that the records made in accordance with Commission rules, and 
certain other records made by investment advisers, must be maintained and produced promptly to 
Commission representatives. 
 
10. The rules adopted under Section 204 of the Advisers Act, including Advisers Act 
Rule 204-2(a)(7), require that investment advisers preserve for at least five years in an easily 
accessible place, the first two years in an appropriate office of the investment adviser, originals of all 
communications received and copies of all written communications sent relating to, among other 
things: (a) any recommendation made or proposed to be made and any advice given or proposed to 
be given; (b) any receipt, disbursement or delivery of funds or securities; (c) the placing or 
execution of any order to purchase or sell any security; or (d) predecessor performance and the 
performance or rate of return of any or all managed accounts, portfolios, or securities 
recommendations. 
 
Respondent’s Policies and Procedures 
11. KKR and its affiliated advisers adopted compliance policies and procedures, 
including policies and procedures designed to ensure the retention of business-related records, 
including electronic communications, in compliance with the relevant recordkeeping provisions. 
 
12. Personnel of KKR were advised that the use of unapproved electronic 
communications methods, including on their personal devices, was not permitted, and that they 
should not use unapproved personal email, chats or text messaging applications for business 
purposes. 
 
13. Messages sent through firm-approved communications methods were monitored, 
subject to review, and archived. Messages sent through unapproved communications methods, 
such as unapproved applications on personal devices, were not monitored, subject to review or 
archived. 
 
 14. KKR’s personnel received training, which was designed to address the firm’s 
education and supervision of its personnel and adherence to KKR’s books and recordkeeping 
requirements. The policies and related trainings notified personnel that electronic communications 
on approved platforms were subject to surveillance by KKR. KKR had procedures for all 
personnel requiring annual self-attestations of compliance. 
  
15.  KKR failed to implement a system reasonably expected to determine whether 
personnel were following the firm’s policies and procedures regarding electronic communications. 
While permitting personnel to use approved communications methods, including on personal 

 
 
4 
 
and/or firm-issued devices, for business communications, KKR failed to implement sufficient 
monitoring to ensure that its recordkeeping and communications policies were being followed. 
 
Respondent’s Recordkeeping Failures  
16. In October 2022, the Commission staff commenced a risk-based initiative to 
investigate whether investment advisers were properly maintaining communications that they were 
required to preserve as records under the Advisers Act. KKR cooperated with the investigation by 
proactively gathering and reviewing communications from the electronic devices of certain of its 
personnel and responding to the staff’s requests for additional information. KKR also produced, at 
the request of the Commission staff, off-channel communications of a subset of these personnel 
relating to KKR’s investment advisory business. These personnel included senior personnel, such 
as managing directors and partners. 
 
17. The Commission staff’s investigation found off-channel communications by KKR 
personnel, including at senior levels. All of the personnel whose communications were produced 
in the course of the investigation had sent or received multiple off-channel communications that 
were records required to be preserved by KKR under the Advisers Act. These off-channel 
communications were sent among colleagues at KKR, as well as to external market participants. 
 
18. During the Relevant Period, personnel at KKR sent and received off-channel text 
messages subject to the recordkeeping requirements of Advisers Act Rule 204-2. 
 
19. These off-channel communications included records required to be preserved under 
the Advisers Act because they related to recommendations made or proposed to be made or advice 
given or proposed to be given. For example, two KKR partners exchanged messages on an 
unapproved platform concerning the specific pricing, within the range previously approved by the 
investment committee responsible for a client’s investments, at which KKR should bid for the 
client to participate in a transaction. 
 
20. As another example, the two KKR partners exchanged messages on an unapproved 
platform concerning whether KKR should offer to have one or more of its private fund clients buy 
into the junior tranche of a transaction. 
 
21. In 2020, KKR’s compliance monitoring tool identified two references to the use of 
WhatsApp by a KKR partner (“Partner A”), including communications between Partner A and 
another senior employee. These communications made clear that Partner A had been using 
WhatsApp to communicate with the senior executive of a third-party entity about a potential 
transaction. 
 
22. After KKR’s monitoring tool detected these references to the use of WhatsApp, a 
senior member of Respondent’s compliance department (the “Compliance Officer”) met with 
Partner A. The agenda for the meeting included updates on numerous aspects of KKR’s compliance 
program, including its prohibition on the use of off-channel communications platforms. Unlike 
other KKR employees whose use of off-channel platforms was identified by the surveillance 
software, Partner A did not receive a written reminder of the policies as a result of their violation. 
The compliance department did not collect the referenced WhatsApp messages from Partner A. 

 
 
5 
 
 
23. In the six months following the 2020 meeting with the Compliance Officer which 
included off-channel communication platforms as an agenda item, Partner A sent and received a 
significant number of business-related messages on unapproved platforms. In particular, Partner A 
exchanged messages with at least five other KKR partners concerning KKR business. 
 
24. Among these off-channel communications was a series of messages with two other 
partners of Respondent (“Partner B” and “Partner C”). In this exchange, Partner B suggested that 
all three partners should set their mobile devices to delete messages after 30 days—an action that 
would have violated KKR’s policies and procedures concerning the retention of business-related 
records.  
 
25. At the time of that series of messages, Partner B had recently changed the settings on 
their mobile device to delete messages after 30 days; Partner C did so in response to the 
suggestion.
2
 Partner A responded to the messages that they intended to change their settings, 
although Partner A did not, in fact, do so.  None of the partners consulted with the legal or 
compliance personnel of KKR about changing these settings.  
 
Respondent’s Failure to Preserve Required Records Potentially 
Compromised and Delayed Commission Matters 
26. During the Relevant Period, KKR received and responded to Commission records 
requests in Commission investigations. By failing to maintain and preserve required records 
relating to its investment advisory businesses, KKR may have deprived the Commission of these 
off-channel communications in investigations. 
 
Respondent’s Violations and Failure to Supervise 
27. As a result of the conduct described above, KKR willfully
3
 violated Section 204 of 
the Advisers Act and Rule 204-2(a)(7) thereunder. 
 
28. As a result of the conduct described above, KKR failed reasonably to supervise its 
personnel, with a view to preventing or detecting certain of its supervised persons’ aiding and 
abetting violations of Section 204 of the Advisers Act and Rule 204-2(a)(7) thereunder, within the 
meaning of Section 203(e)(6) of the Advisers Act. 
 
                                                 
2
  The number of messages deleted as a result of the setting changes was mitigated because 
Partner C had another personal device on which at least some of the relevant off-channel 
communications were stored and not deleted. 
 
3
  “Willfully,” for purposes of imposing relief under Section 203(e) of the Advisers Act, 
“‘means no more than that the person charged with the duty knows what he is doing.’”  See 
Wonsover v. SEC, 205 F.3d 408, 414 (D.C. Cir 2000) (quoting Hughes v. SEC, 174 F.2d 969, 
977 (D.C. Cir. 1949)). 

 
 
6 
 
Respondent’s Efforts to Comply 
29. In determining to accept the Offer, the Commission considered steps undertaken by 
KKR prior to and after being approached by the Commission staff, as well as cooperation afforded 
the Commission staff. Prior to this action, certain policies and procedures to which Respondent’s 
personnel were subject to concerning the use of approved communications methods, including on 
personal devices, were enhanced. In early 2020, the firm implemented enhanced surveillance 
software and approved internal messaging platforms.  In late 2021, the firm began making 
available to its employees certain options for preserved messaging with third parties. 
 
Undertakings 
 
The Respondent has undertaken to: 
 
 30. Internal Audit.  Within one hundred eighty (180) days of the entry of this Order, 
KKR shall require that its Internal Audit function initiate a separate audit(s), to be completed 
within three hundred and sixty-five (365) days of the entry of this Order, consisting of the 
following: 
 
a. A comprehensive review of KKR’s supervisory, compliance, and other policies 
and procedures designed to ensure that KKR’s electronic communications, 
including those found on personal electronic devices, including without 
limitation, cellular phones (“Personal Devices”), are preserved in accordance 
with the requirements of the federal securities laws.  This review should 
include, but not be limited to, a review of KKR’s policies and procedures to 
ascertain if they provide for any significant technology and/or behavioral 
restrictions that help prevent the risk of the use of unapproved communications 
methods on Personal Devices in work conditions (e.g., traveling, site visits).  
 
b. A comprehensive review of training conducted by KKR designed to ensure 
personnel are complying with the requirements regarding the preservation of 
electronic communications, including those found on Personal Devices, in 
accordance with the requirements of the federal securities laws, as well as a 
review of KKR’s requirement that its personnel certify in writing on a periodic  
basis that they are complying with preservation requirements. 
 
c. An assessment of the surveillance program measures implemented by KKR 
designed to ensure compliance, on an ongoing basis, with the requirements 
found in the federal securities laws to preserve electronic communications, 
including those found on Personal Devices.  
 
d. An assessment of the technological solutions that KKR has begun 
implementing to meet the record retention requirements of the federal securities 
laws, including an assessment of the likelihood that KKR personnel will use the 

 
 
7 
 
technological solutions going forward and a review of the measures employed 
by KKR to track personnel usage of new technological solutions.  
 
e. A comprehensive review of the framework adopted by KKR to address 
instances of non-compliance by KKR personnel with KKR’s policies and 
procedures concerning the use of Personal Devices to communicate about KKR 
business. This review shall include a survey of how KKR determined which 
personnel failed to comply with KKR policies and procedures, the corrective 
action carried out, an evaluation of who violated the policies and procedures 
and why, what penalties were imposed, and whether penalties were handed out 
consistently across business lines and seniority levels. 
 
 31. Recordkeeping.  KKR shall preserve any record of compliance with these 
undertakings, including any materials supporting the certification made pursuant to Paragraph 32,  
in an easily accessible place for a period of not less than five (5) years from the end of the fiscal 
year during which the last entry was made on such record, the first two (2) years in an appropriate 
office of KKR.  
 
 32. Certification.  KKR shall certify, in writing, compliance with the undertakings set 
forth above.  The certification shall identify the undertakings and provide written evidence of 
compliance in the form of a narrative.  The Commission staff may make reasonable requests for 
further evidence of compliance, and Respondent agrees to provide such evidence.  The 
certification shall be submitted to Thomas P. Smith, Jr., Associate Regional Director, Division of 
Enforcement, Securities and Exchange Commission, New York Regional Office, 100 Pearl Street, 
Suite 20-100, New York, NY 10004, or such other person as the Commission staff may request, 
with a copy to the Office of Chief Counsel of the Enforcement Division, no later than sixty (60) 
days from the date of the completion of the undertakings. 
 
 In determining whether to accept the Offer, the Commission has considered these 
undertakings. 
 
IV. Sanc tions 
 In view of the foregoing, the Commission deems it appropriate and in the public interest 
to impose the sanctions agreed to in Respondent’s Offer. 
 
 Accordingly, pursuant to Sections 203(e) and 203(k) of the Advisers Act, it is hereby 
ORDERED that: 
 
A. Respondent cease and desist from committing or causing any violations and any 
future violations of Section 204 of the Advisers Act and Rule 204-2 thereunder. 
B. Respondent is censured.  

 
 
8 
 
 C. Respondent shall, within fourteen (14) days of the entry of this Order, pay a civil 
money penalty in the amount of $11,000,000.00 to the Securities and Exchange Commission for 
transfer to the general fund of the United States Treasury, subject to Exchange Act Section 
21F(g)(3).  If timely payment is not made, additional interest shall accrue pursuant to 31 U.S.C. 
§ 3717.   
 
 Payment must be made in one of the following ways:   
 
(1) Respondent may transmit payment electronically to the Commission, 
which will provide detailed ACH transfer/Fedwire instructions upon 
request;  
 
(2) Respondent may make direct payment from a bank account via Pay.gov 
through the SEC website at http://www.sec.gov/about/offices/ofm.htm; or  
 
(3) Respondent may pay by certified check, bank cashier’s check, or United 
States postal money order, made payable to the Securities and Exchange 
Commission and hand-delivered or mailed to:  
 
Enterprise Services Center 
Accounts Receivable Branch 
HQ Bldg., Room 181, AMZ-341 
6500 South MacArthur Boulevard 
Oklahoma City, OK 73169 
 
Payments by check or money order must be accompanied by a cover letter identifying 
Kohlberg Kravis Roberts & Co. L.P.  as the Respondent in these proceedings, and the file number 
of these proceedings; a copy of the cover letter and check or money order must be sent to 
Thomas P. Smith, Jr., Associate Regional Director, Division of Enforcement, Securities and 
Exchange Commission, New York Regional Office, 100 Pearl Street, Suite 20-100, New York, 
NY 10004.   
 
 D. Amounts ordered to be paid as civil money penalties pursuant to this Order shall 
be treated as penalties paid to the government for all purposes, including all tax purposes.  To 
preserve the deterrent effect of the civil penalty, Respondent agrees that in any Related Investor 
Action, it shall not argue that it is entitled to, nor shall it benefit by, offset or reduction of any  
award of compensatory damages by the amount of any part of Respondent’s payment of a civil 
penalty in this action (“Penalty Offset”).  If the court in any Related Investor Action grants such 
a Penalty Offset, Respondent agrees that it shall, within thirty (30) days after entry of a final 
order granting the Penalty Offset, notify the Commission’s counsel in this action and pay the 
amount of the Penalty Offset to the Securities and Exchange Commission.  Such a payment shall  
  

 
 
9 
 
not be deemed an additional civil penalty and shall not be deemed to change the amount of the 
civil penalty imposed in this proceeding.  For purposes of this paragraph, a “Related Investor 
Action” means a private damages action brought against Respondent by or on behalf of one or 
more investors based on substantially the same facts as alleged in the Order instituted by the 
Commission in this proceeding. 
 
 
 By the Commission. 
 
 
 
Vanessa A. Countryman 
       Secretary 
 

UNITED STATES OF AMERICA 

Before the 

SECURITIES AND EXCHANGE COMMISSION 

 

INVESTMENT ADVISERS ACT OF 1940 

Release No. 6814 / January 13, 2025 

 

ADMINISTRATIVE PROCEEDING 

File No. 3-22401 

  

 

In the Matter of 

 

Kohlberg Kravis Roberts & 

Co. L.P., 

 

Respondent. 

 

ORDER INSTITUTING ADMINISTRATIVE 

AND CEASE-AND-DESIST PROCEEDINGS, 

PURSUANT TO SECTIONS 203(e) AND 

203(k) OF THE INVESTMENT ADVISERS 

ACT OF 1940, MAKING FINDINGS, AND 

IMPOSING REMEDIAL SANCTIONS AND 

A CEASE-AND-DESIST ORDER 

 

I. Introd uction 

 The Securities and Exchange Commission (“Commission”) deems it appropriate and in the 

public interest that public administrative and cease-and-desist proceedings be, and hereby are, 

instituted pursuant to Sections 203(e) and 203(k) of the Investment Advisers Act of 1940 (“Advisers 

Act”) against Kohlberg Kravis Roberts & Co. L.P. (“KKR” or “Respondent”). 

 

II. Consent 

 In anticipation of the institution of these proceedings, Respondent has submitted an Offer 

of Settlement (“Offer”) that the Commission has determined to accept.  Respondent admits the 

facts set forth in Section III below, acknowledges that its conduct violated the federal securities 

laws, admits the Commission’s jurisdiction over it and the subject matter of these proceedings, and 

consents to the entry of this Order Instituting Administrative and Cease-and-Desist Proceedings, 

Pursuant to Sections 203(e) and 203(k) of the Investment Advisers Act of 1940, Making Findings, 

and Imposing Remedial Sanctions and a Cease-and-Desist Order (“Order”), as set forth below.   

 

III. Facts 

 

 On the basis of this Order and Respondent’s Offer, the Commission finds1 that 

 

 

 

 

                                                 
1  The findings herein are made pursuant to Respondent’s Offer of Settlement and are not 

binding on any other person or entity in this or any other proceeding.  



 

 

2 

 

Summary 

 

1. The federal securities laws impose recordkeeping requirements on registered 

investment advisers to ensure that they responsibly discharge their crucial role in our markets. The 

Commission has long said that compliance with these requirements is essential to investor 

protection and the Commission’s efforts to further its mandate of protecting investors, maintaining 

fair, orderly, and efficient markets, and facilitating capital formation. 

 

2. These proceedings arise out of the failure of Respondent’s personnel, including at 

senior levels, to adhere to certain of these essential requirements and the Respondent’s policies and 

procedures. Using their electronic devices, these personnel communicated both internally and 

externally by text messages and/or other unapproved written communications platforms (“off-

channel communications”). 

 

3. From at least December 2019 (the “Relevant Period”), personnel at KKR sent and 

received off-channel communications that, among other things, related to recommendations made 

or proposed to be made and advice given or proposed to be given in its advisory business.  KKR 

did not maintain or preserve these off-channel communications. These recordkeeping failures were 

firm-wide and involved personnel at various levels of authority. As a result, KKR violated Section 

204 of the Advisers Act and Rule 204-2(a)(7) thereunder. 

 

4. KKR’s failure to implement procedures reasonably expected to prevent off-

channel communications led to KKR’s failure to reasonably supervise its personnel within the 

meaning of Section 203(e)(6) of the Advisers Act. 

 

5. During the Relevant Period, KKR received and responded to Commission records 

requests in Commission investigations. The recordkeeping failures of KKR and its investment 

adviser affiliates may have impacted the Commission’s ability to carry out its regulatory functions 

and investigate violations of the federal securities laws. 

 

6. The Commission staff found KKR’s recordkeeping failures after commencing a 

risk-based initiative to investigate the use of off-channel and unpreserved communications at 

registered investment advisers. KKR has initiated a review of its recordkeeping failures and begun 

a program of remediation.  

 

Respondent 

             7.  KKR is a Delaware limited partnership, with its principal office in New York, 

New York, that has been registered with the Commission as an investment adviser since 2008. 

KKR & Co. Inc., a Delaware corporation, with its principal office in New York, New York, is 

the parent of KKR. 

 

 



 

 

3 

 

Recordkeeping Requirements Under the Advisers Act 

 

8. Section 204 of the Advisers Act authorizes the Commission to issue rules requiring 

investment advisers to make and keep for prescribed periods, and furnish copies of, such records as 

necessary or appropriate in the public interest or for the protection of investors. 

 

9. The Commission adopted Rule 204-2 pursuant to this authority. This rule specifies 

the manner and length of time that the records made in accordance with Commission rules, and 

certain other records made by investment advisers, must be maintained and produced promptly to 

Commission representatives. 

 

10. The rules adopted under Section 204 of the Advisers Act, including Advisers Act 

Rule 204-2(a)(7), require that investment advisers preserve for at least five years in an easily 

accessible place, the first two years in an appropriate office of the investment adviser, originals of all 

communications received and copies of all written communications sent relating to, among other 

things: (a) any recommendation made or proposed to be made and any advice given or proposed to 

be given; (b) any receipt, disbursement or delivery of funds or securities; (c) the placing or 

execution of any order to purchase or sell any security; or (d) predecessor performance and the 

performance or rate of return of any or all managed accounts, portfolios, or securities 

recommendations. 

 

Respondent’s Policies and Procedures 

11. KKR and its affiliated advisers adopted compliance policies and procedures, 

including policies and procedures designed to ensure the retention of business-related records, 

including electronic communications, in compliance with the relevant recordkeeping provisions. 

 

12. Personnel of KKR were advised that the use of unapproved electronic 

communications methods, including on their personal devices, was not permitted, and that they 

should not use unapproved personal email, chats or text messaging applications for business 

purposes. 

 

13. Messages sent through firm-approved communications methods were monitored, 

subject to review, and archived. Messages sent through unapproved communications methods, 

such as unapproved applications on personal devices, were not monitored, subject to review or 

archived. 

 

 14. KKR’s personnel received training, which was designed to address the firm’s 

education and supervision of its personnel and adherence to KKR’s books and recordkeeping 

requirements. The policies and related trainings notified personnel that electronic communications 

on approved platforms were subject to surveillance by KKR. KKR had procedures for all 

personnel requiring annual self-attestations of compliance. 

  

15.  KKR failed to implement a system reasonably expected to determine whether 

personnel were following the firm’s policies and procedures regarding electronic communications. 

While permitting personnel to use approved communications methods, including on personal 



 

 

4 

 

and/or firm-issued devices, for business communications, KKR failed to implement sufficient 

monitoring to ensure that its recordkeeping and communications policies were being followed. 

 

Respondent’s Recordkeeping Failures  

16. In October 2022, the Commission staff commenced a risk-based initiative to 

investigate whether investment advisers were properly maintaining communications that they were 

required to preserve as records under the Advisers Act. KKR cooperated with the investigation by 

proactively gathering and reviewing communications from the electronic devices of certain of its 

personnel and responding to the staff’s requests for additional information. KKR also produced, at 

the request of the Commission staff, off-channel communications of a subset of these personnel 

relating to KKR’s investment advisory business. These personnel included senior personnel, such 

as managing directors and partners. 

 

17. The Commission staff’s investigation found off-channel communications by KKR 

personnel, including at senior levels. All of the personnel whose communications were produced 

in the course of the investigation had sent or received multiple off-channel communications that 

were records required to be preserved by KKR under the Advisers Act. These off-channel 

communications were sent among colleagues at KKR, as well as to external market participants. 

 

18. During the Relevant Period, personnel at KKR sent and received off-channel text 

messages subject to the recordkeeping requirements of Advisers Act Rule 204-2. 

 

19. These off-channel communications included records required to be preserved under 

the Advisers Act because they related to recommendations made or proposed to be made or advice 

given or proposed to be given. For example, two KKR partners exchanged messages on an 

unapproved platform concerning the specific pricing, within the range previously approved by the 

investment committee responsible for a client’s investments, at which KKR should bid for the 

client to participate in a transaction. 

 

20. As another example, the two KKR partners exchanged messages on an unapproved 

platform concerning whether KKR should offer to have one or more of its private fund clients buy 

into the junior tranche of a transaction. 

 

21. In 2020, KKR’s compliance monitoring tool identified two references to the use of 

WhatsApp by a KKR partner (“Partner A”), including communications between Partner A and 

another senior employee. These communications made clear that Partner A had been using 

WhatsApp to communicate with the senior executive of a third-party entity about a potential 

transaction. 

 

22. After KKR’s monitoring tool detected these references to the use of WhatsApp, a 

senior member of Respondent’s compliance department (the “Compliance Officer”) met with 

Partner A. The agenda for the meeting included updates on numerous aspects of KKR’s compliance 

program, including its prohibition on the use of off-channel communications platforms. Unlike 

other KKR employees whose use of off-channel platforms was identified by the surveillance 

software, Partner A did not receive a written reminder of the policies as a result of their violation. 

The compliance department did not collect the referenced WhatsApp messages from Partner A. 



 

 

5 

 

 

23. In the six months following the 2020 meeting with the Compliance Officer which 

included off-channel communication platforms as an agenda item, Partner A sent and received a 

significant number of business-related messages on unapproved platforms. In particular, Partner A 

exchanged messages with at least five other KKR partners concerning KKR business. 

 

24. Among these off-channel communications was a series of messages with two other 

partners of Respondent (“Partner B” and “Partner C”). In this exchange, Partner B suggested that 

all three partners should set their mobile devices to delete messages after 30 days—an action that 

would have violated KKR’s policies and procedures concerning the retention of business-related 

records.  

 

25. At the time of that series of messages, Partner B had recently changed the settings on 

their mobile device to delete messages after 30 days; Partner C did so in response to the 

suggestion.2 Partner A responded to the messages that they intended to change their settings, 

although Partner A did not, in fact, do so.  None of the partners consulted with the legal or 

compliance personnel of KKR about changing these settings.  

 

Respondent’s Failure to Preserve Required Records Potentially 

Compromised and Delayed Commission Matters 

26. During the Relevant Period, KKR received and responded to Commission records 

requests in Commission investigations. By failing to maintain and preserve required records 

relating to its investment advisory businesses, KKR may have deprived the Commission of these 

off-channel communications in investigations. 

 

Respondent’s Violations and Failure to Supervise 

27. As a result of the conduct described above, KKR willfully3 violated Section 204 of 

the Advisers Act and Rule 204-2(a)(7) thereunder. 

 

28. As a result of the conduct described above, KKR failed reasonably to supervise its 

personnel, with a view to preventing or detecting certain of its supervised persons’ aiding and 

abetting violations of Section 204 of the Advisers Act and Rule 204-2(a)(7) thereunder, within the 

meaning of Section 203(e)(6) of the Advisers Act. 

 

                                                 
2  The number of messages deleted as a result of the setting changes was mitigated because 

Partner C had another personal device on which at least some of the relevant off-channel 

communications were stored and not deleted. 

 
3  “Willfully,” for purposes of imposing relief under Section 203(e) of the Advisers Act, 

“‘means no more than that the person charged with the duty knows what he is doing.’”  See 

Wonsover v. SEC, 205 F.3d 408, 414 (D.C. Cir 2000) (quoting Hughes v. SEC, 174 F.2d 969, 

977 (D.C. Cir. 1949)). 



 

 

6 

 

Respondent’s Efforts to Comply 

29. In determining to accept the Offer, the Commission considered steps undertaken by 

KKR prior to and after being approached by the Commission staff, as well as cooperation afforded 

the Commission staff. Prior to this action, certain policies and procedures to which Respondent’s 

personnel were subject to concerning the use of approved communications methods, including on 

personal devices, were enhanced. In early 2020, the firm implemented enhanced surveillance 

software and approved internal messaging platforms.  In late 2021, the firm began making 

available to its employees certain options for preserved messaging with third parties. 

 

Undertakings 

 

The Respondent has undertaken to: 

 

 30. Internal Audit.  Within one hundred eighty (180) days of the entry of this Order, 

KKR shall require that its Internal Audit function initiate a separate audit(s), to be completed 

within three hundred and sixty-five (365) days of the entry of this Order, consisting of the 

following: 

 

a. A comprehensive review of KKR’s supervisory, compliance, and other policies 

and procedures designed to ensure that KKR’s electronic communications, 

including those found on personal electronic devices, including without 

limitation, cellular phones (“Personal Devices”), are preserved in accordance 

with the requirements of the federal securities laws.  This review should 

include, but not be limited to, a review of KKR’s policies and procedures to 

ascertain if they provide for any significant technology and/or behavioral 

restrictions that help prevent the risk of the use of unapproved communications 

methods on Personal Devices in work conditions (e.g., traveling, site visits).  

 

b. A comprehensive review of training conducted by KKR designed to ensure 

personnel are complying with the requirements regarding the preservation of 

electronic communications, including those found on Personal Devices, in 

accordance with the requirements of the federal securities laws, as well as a 

review of KKR’s requirement that its personnel certify in writing on a periodic  

basis that they are complying with preservation requirements. 

 

c. An assessment of the surveillance program measures implemented by KKR 

designed to ensure compliance, on an ongoing basis, with the requirements 

found in the federal securities laws to preserve electronic communications, 

including those found on Personal Devices.  

 

d. An assessment of the technological solutions that KKR has begun 

implementing to meet the record retention requirements of the federal securities 

laws, including an assessment of the likelihood that KKR personnel will use the 



 

 

7 

 

technological solutions going forward and a review of the measures employed 

by KKR to track personnel usage of new technological solutions.  

 

e. A comprehensive review of the framework adopted by KKR to address 

instances of non-compliance by KKR personnel with KKR’s policies and 

procedures concerning the use of Personal Devices to communicate about KKR 

business. This review shall include a survey of how KKR determined which 

personnel failed to comply with KKR policies and procedures, the corrective 

action carried out, an evaluation of who violated the policies and procedures 

and why, what penalties were imposed, and whether penalties were handed out 

consistently across business lines and seniority levels. 

 

 31. Recordkeeping.  KKR shall preserve any record of compliance with these 

undertakings, including any materials supporting the certification made pursuant to Paragraph 32,  

in an easily accessible place for a period of not less than five (5) years from the end of the fiscal 

year during which the last entry was made on such record, the first two (2) years in an appropriate 

office of KKR.  

 

 32. Certification.  KKR shall certify, in writing, compliance with the undertakings set 

forth above.  The certification shall identify the undertakings and provide written evidence of 

compliance in the form of a narrative.  The Commission staff may make reasonable requests for 

further evidence of compliance, and Respondent agrees to provide such evidence.  The 

certification shall be submitted to Thomas P. Smith, Jr., Associate Regional Director, Division of 

Enforcement, Securities and Exchange Commission, New York Regional Office, 100 Pearl Street, 

Suite 20-100, New York, NY 10004, or such other person as the Commission staff may request, 

with a copy to the Office of Chief Counsel of the Enforcement Division, no later than sixty (60) 

days from the date of the completion of the undertakings. 

 

 In determining whether to accept the Offer, the Commission has considered these 

undertakings. 

 

IV. Sanctions 

 In view of the foregoing, the Commission deems it appropriate and in the public interest 

to impose the sanctions agreed to in Respondent’s Offer. 

 

 Accordingly, pursuant to Sections 203(e) and 203(k) of the Advisers Act, it is hereby 

ORDERED that: 

 

A. Respondent cease and desist from committing or causing any violations and any 

future violations of Section 204 of the Advisers Act and Rule 204-2 thereunder. 

B. Respondent is censured.  



 

 

8 

 

 C. Respondent shall, within fourteen (14) days of the entry of this Order, pay a civil 

money penalty in the amount of $11,000,000.00 to the Securities and Exchange Commission for 

transfer to the general fund of the United States Treasury, subject to Exchange Act Section 

21F(g)(3).  If timely payment is not made, additional interest shall accrue pursuant to 31 U.S.C. 

§ 3717.   

 

 Payment must be made in one of the following ways:   

 

(1) Respondent may transmit payment electronically to the Commission, 

which will provide detailed ACH transfer/Fedwire instructions upon 

request;  

 

(2) Respondent may make direct payment from a bank account via Pay.gov 

through the SEC website at http://www.sec.gov/about/offices/ofm.htm; or  

 

(3) Respondent may pay by certified check, bank cashier’s check, or United 

States postal money order, made payable to the Securities and Exchange 

Commission and hand-delivered or mailed to:  

 

Enterprise Services Center 

Accounts Receivable Branch 

HQ Bldg., Room 181, AMZ-341 

6500 South MacArthur Boulevard 

Oklahoma City, OK 73169 

 

Payments by check or money order must be accompanied by a cover letter identifying 

Kohlberg Kravis Roberts & Co. L.P.  as the Respondent in these proceedings, and the file number 

of these proceedings; a copy of the cover letter and check or money order must be sent to 

Thomas P. Smith, Jr., Associate Regional Director, Division of Enforcement, Securities and 

Exchange Commission, New York Regional Office, 100 Pearl Street, Suite 20-100, New York, 

NY 10004.   

 

 D. Amounts ordered to be paid as civil money penalties pursuant to this Order shall 

be treated as penalties paid to the government for all purposes, including all tax purposes.  To 

preserve the deterrent effect of the civil penalty, Respondent agrees that in any Related Investor 

Action, it shall not argue that it is entitled to, nor shall it benefit by, offset or reduction of any  

award of compensatory damages by the amount of any part of Respondent’s payment of a civil 

penalty in this action (“Penalty Offset”).  If the court in any Related Investor Action grants such 

a Penalty Offset, Respondent agrees that it shall, within thirty (30) days after entry of a final 

order granting the Penalty Offset, notify the Commission’s counsel in this action and pay the 

amount of the Penalty Offset to the Securities and Exchange Commission.  Such a payment shall  

  



 

 

9 

 

not be deemed an additional civil penalty and shall not be deemed to change the amount of the 

civil penalty imposed in this proceeding.  For purposes of this paragraph, a “Related Investor 

Action” means a private damages action brought against Respondent by or on behalf of one or 

more investors based on substantially the same facts as alleged in the Order instituted by the 

Commission in this proceeding. 

 

 

 By the Commission. 

 

 

 

Vanessa A. Countryman 

       Secretary 

 


	I. Introduction
	II. Consent
	III. Facts
	Summary
	Respondent
	Respondent’s Policies and Procedures
	Respondent’s Recordkeeping Failures
	Respondent’s Failure to Preserve Required Records Potentially Compromised and Delayed Commission Matters
	Respondent’s Violations and Failure to Supervise
	Respondent’s Efforts to Comply

	IV. Sanctions