{"id":5843,"date":"2015-09-03T00:00:00","date_gmt":"2015-09-03T05:00:00","guid":{"rendered":"https:\/\/institutionalinvestorsecuritiesblog.blawgcloud.com\/2015\/09\/sec_orders_investment_advisory"},"modified":"2015-09-03T00:00:00","modified_gmt":"2015-09-03T05:00:00","slug":"sec-orders-investment-advisory","status":"publish","type":"post","link":"https:\/\/www.investorlawyers.com\/blog\/sec-orders-investment-advisory\/","title":{"rendered":"SEC Orders Investment Advisory Firm to pay $21M For Allegedly Retaining Clients\u2019 CDO Fees"},"content":{"rendered":"

Taberna Capital Management has consented to pay $21 million to resolve Securities and Exchange Commission charges alleging that it fraudulently kept fees that belonged to collateralized debt obligation<\/a> clients. According to the regulator, the investment advisor retained \u201cexchange fees\u201d related to restructuring transactions, which was not allowed under the CDOs governing documents. The retention of the fees was purportedly not disclosed to investors.<\/p>\n

The SEC maintains that these fees belonged to the CDOs and became a conflict interest that was not revealed. According to the agency\u2019s order instituting administrative proceedings, for three years, from \u201909 to \u201912, the Pennsylvania-based investment advisory firm sought and kept millions of dollars in exchange fees paid by issuers of the securities that the CDOs held when Taberna recommended exchange transactions to clients. The SEC said that those fees actually belonged to the CDOs and that the firm made its misconduct difficult to identify by improperly labeling the fees as third party costs in documents even though these costs were only a small portion of the total exchange fees.<\/p>\n

Also, said the SEC, Taberna did not mention these fees in quarterly reports to investors nor did it identify them in Forms ADV even though they should have been noted. The regulator said the retention of the fees set up a conflict of interest between the firm and investors and CDO clients, even at times giving Taberna incentive to steer issuers toward a particular exchange regardless of what restructuring might benefit it the most.<\/p>\n

Continue Reading \u203a<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

Taberna Capital Management has consented to pay $21 million to resolve Securities and Exchange Commission charges alleging that it fraudulently kept fees that belonged to collateralized debt obligation clients. According to the regulator, the investment advisor retained \u201cexchange fees\u201d related to restructuring transactions, which was not allowed under the CDOs governing documents. The retention of […]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"footnotes":""},"categories":[3742,3781,3760,3795,3761],"tags":[],"class_list":["post-5843","post","type-post","status-publish","format-standard","hentry","category-collateralized-debt-obligation","category-investment-advisers","category-sec-enforcement","category-sec-settlements","category-securities-and-exchange-commis"],"yoast_head":"\nSEC Orders Investment Advisory Firm to pay $21M For Allegedly Retaining Clients\u2019 CDO Fees — Investor Lawyers Blog — September 3, 2015<\/title>\n<meta name=\"description\" content=\"Taberna Capital Management has consented to pay $21 million to resolve Securities and Exchange Commission charges alleging that it fraudulently kept fees — September 3, 2015\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, 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