Putting Teeth Into the Compliance Rule: SEC Imposes US$5 Million Penalty on Investment Adviser for Valuation Practices

The SEC’s penalty against fixed-income manager Deer Park signals increased vigilance over investment advisers’ valuation policies for client assets.

On June 4, 2019, Deer Park Road Management Company, LP (Deer Park or the firm) agreed to settle Securities and Exchange Commission (SEC) charges stemming from Deer Park’s violation of Section 206(4) of the Investment Advisers Act of 1940 (the Advisers Act) and Rule 206(4)-7 (the Compliance Rule) by agreeing to an SEC order imposing a US$5 million penalty and other relief (the Order).