SEC Focuses on Fair Valuation in Recent Enforcement Cases

The U.S. Securities and Exchange Commission (“SEC”) issued an order commencing an administrative proceeding against the former members of the boards of directors (“Boards”) of five registered investment companies on December 10, 2012, charging them with alleged violations of the Boards’ responsibilities to fair value portfolio securities for which market quotations were not readily available (“RMK Board Proceeding”). This proceeding, which is currently pending, follows the recent settlement of another portfolio securities valuation case involving an internally-managed business development company (“BDC”), and the commencement of civil litigation against a hedge fund firm and its principals over, among other things, portfolio valuation issues. To keep reading, download the full article.