Securities Law Daily provides daily coverage of developments in the regulation of federal, state, and international securities and futures trading, with objective coverage of the...
By Richard Hill
Nov. 3 — New York-based private equity firm Fenway Partners LLC and four current or former executives agreed Nov. 3 to pay $10.241 million to settle first-of-their kind Securities and Exchange Commission allegations they failed to disclose conflicts of interest arising from their use of a client fund's assets.
Fenway and the four executives allegedly paid an affiliated entity for consulting services using assets of the fund or its portfolio companies. They also allegedly used the assets—more than $20 million in total—to pay a former principal and other former employees for services performed primarily when they still were with Fenway.
“Investment advisers violate federal securities laws when they don't disclose transactions with affiliates that give rise to conflicts of interest,” SEC Enforcement Director Andrew Ceresney said in a conference call with reporters. The case reflects the SEC's “significant focus” on private equity firms in the last several years, he said, adding that more cases are “in the pipeline.”
The move—and the prospect of additional cases—was forecast late last month by SEC enforcement officials at a Practising Law Institute gathering.
Fenway Partners and the individual respondents—Peter Lamm, William Gregory Smart, Timothy Mayhew Jr. and Walter Wiacek—settled the case without admitting or denying the allegations. Lamm, Smart and Mayhew owned and controlled Fenway and principally owned and controlled Fenway Consulting. Wiacek was Fenway's vice president, chief financial officer and chief compliance officer.
The total amount of the disgorgement and sanctions—$10,241,471—will be distributed to affected investors.
To contact the reporter on this story: Richard Hill in Washington at email@example.com
To contact the editor responsible for this story: Phyllis Diamond at firstname.lastname@example.org
The order in the case can be seen at http://www.sec.gov/litigation/admin/2015/ia-4253.pdf.
All Bloomberg BNA treatises are available on standing order, which ensures you will always receive the most current edition of the book or supplement of the title you have ordered from Bloomberg BNA’s book division. As soon as a new supplement or edition is published (usually annually) for a title you’ve previously purchased and requested to be placed on standing order, we’ll ship it to you to review for 30 days without any obligation. During this period, you can either (a) honor the invoice and receive a 5% discount (in addition to any other discounts you may qualify for) off the then-current price of the update, plus shipping and handling or (b) return the book(s), in which case, your invoice will be cancelled upon receipt of the book(s). Call us for a prepaid UPS label for your return. It’s as simple and easy as that. Most importantly, standing orders mean you will never have to worry about the timeliness of the information you’re relying on. And, you may discontinue standing orders at any time by contacting us at 1.800.960.1220 or by sending an email to email@example.com.
Put me on standing order at a 5% discount off list price of all future updates, in addition to any other discounts I may quality for. (Returnable within 30 days.)
Notify me when updates are available (No standing order will be created).
This Bloomberg BNA report is available on standing order, which ensures you will all receive the latest edition. This report is updated annually and we will send you the latest edition once it has been published. By signing up for standing order you will never have to worry about the timeliness of the information you need. And, you may discontinue standing orders at any time by contacting us at 1.800.372.1033, option 5, or by sending us an email to firstname.lastname@example.org.
Put me on standing order
Notify me when new releases are available (no standing order will be created)