Fund Manager Settles for $5m With SEC After Failings in Fund Asset Valuations

Published On June 10, 2019

A private fund manager has agreed to pay the US Securities and Exchange Commission (SEC) a $5m penalty to settle after it found compliance deficiencies.

The SEC found that the investment adviser, Deer Park Road Management Company LP, did not have appropriate policies and procedures in place to tackle the risk that its traders were undervaluing securities and selling for a profit. SEC further held that the firm had failed to take protective steps against its traders providing inaccurate information to vendors. In some instances, valuations were approved even when detailed as “undervalued” or with comments to “mark up gradually”.