The individual was charged by the SEC for a violation of Section 206(2) of the Investment Advisers Act of 1940 and agreed to pay a $250,000 penalty without admitting or denying the SEC’s findings.
What Was Discovered By The SEC?
- Over a four-year period, a closed-end publicly traded fund loaned subsidiaries in amounts close to $75 million to a film distribution company.
- The fund’s co-manager, who had a significant role in recommending the fund, asked the recipient to help his daughter’s acting career. They helped her obtain a small role in a produced film.
- The Co-Manager did not disclose to the Board of Trustees or the Compliance/Legal Teams that he had asked for help on his daughters’ behalf.
Vigilant’s Final Conclusion
This should serve as a reminder for employees to disclose any possible conflict(s) of interest to their Compliance Department.
Conflicts of interest can occur through any medium, not only financial interest.
Compliance Officers should be equipped to help their employees navigate the regulatory environment and use proactive disclosures to prevent SEC charges.
If your Firm is in need of monitoring and enforcing time-tested Compliance practices, contact Vigilant today for assistance.